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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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AIFs: Property authorised investment funds (Property AIFs): leaving the Property AIF regime: effects of leaving

Effects of cessation from leaving or exclusion from the regime (regulation 69Z41 SI2006/964)

The effects on an open-ended investment company (OEIC) leaving or being excluded from the regime are as follows:

  • the tax-exempt property business of the company is treated as ceasing immediately on cessation,
  • assets held by the company which were involved in the tax-exempt property business are treated for Capital Allowances purposes only, as being sold immediately before cessation by the tax-exempt business and reacquired by the OEIC immediately after cessation at the tax written down value, with amounts written down as ‘shadow’ capital allowances during membership of the PAIF regime taken into account in calculating the written down value. This reverses the process on entry (see CTM48826 for details), and
  • the OEIC’s accounting period is treated as ending on the date of cessation and a new one will begin immediately post-cessation.

For the purposes of Capital Allowances Act 2001, anything done by or to an asset deemed to be sold and reacquired (as per the second bullet point above) by the company before cessation is treated after cessation as having been done by or to the asset by the company after cessation.