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HMRC internal manual

Company Taxation Manual

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HM Revenue & Customs
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Authorised investment funds (AIFs): qualified investor schemes: treatment of certain investors in periods up to 31 December 2008

Introduction

A person (including a corporate body but with certain exceptions) who, together or with associates or connected persons, owned units representing rights to 10% or more of the net asset value of the fund constituting the qualified investor scheme (QIS) owned a ‘substantial QIS holding’, as defined in regulation 54 SI2006/964.

  • Associates are as defined at ICTA88/S417, (CTM60150).
  • Connected persons are as defined at ICTA88/S839 (for guidance see CG14580 onwards which deals with similarly worded legislation).

The charge to tax on substantial QIS holdings in a QIS is covered in chapter 4, part 4 SI2006/964.

However, from the 1 January 2009 the substantial QIS holding rule ceased to apply and the charge to tax in chapter 4 of part 4 only has effect until 31 December 2008 for investors with a substantial holding in a QIS that was established before this date.

Measuring dates applied after the 1 January 2009 - SI2006/964 Regulation 56

In accordance with transitional arrangements outlined in CTM48715 the dates specified above cease to have effect from the 1 January 2009 (as the substantial holding rules come to an end on that date). They are replaced by the two measuring dates below to ensure that any substantial holders fair value their holdings from:

  • the earlier measuring date - that is date that was the later measuring date on the last occasion that the value was calculated in accordance with the dates used before the 1 January 2009 under this regulation, to
  • the later measuring date which is 31 December 2008.

(Both these measuring dates were inserted by regulation 31 SI2008/3159.)