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HMRC internal manual

Investment Funds Manual

From:
HM Revenue & Customs
Published:
5 July 2019
Updated:
7 March 2022 - See all updates

IFM09340 - Taxation of investors: Chargeable gains: Deemed Disposals: events causing a deemed disposal

There are some occasions where participants are deemed to have disposed of and reacquired their units in a RIF:

  • Where a RIF changes the restriction condition it is relying on from meeting the UK property rich condition to meeting the non-UK property assets condition - Regulation 15(3) (IFM09510).
  • Where a RIF breaches the ownership requirement and that is rectified after 30 days of the breach but before 9 months after the breach - Regulation 16(4) (IFM09530).
  • Where a RIF breaches the restriction requirement and that is rectified before 9 months after the breach - Regulation 18(4) (IFM09540).
  • Where a RIF ceases to meet the UK property rich condition during its winding up period - Regulation 19(2) (IFM09550).
  • Where a scheme ceases to be a RIF (IFM09680) - Regulation 25(2) provides an exception where a scheme ceases to be a RIF and becomes a co-ownership authorised contractual scheme, provided the relevant conditions in that paragraph are met. In those circumstances, the deemed disposal rule in regulation 25(1) does not apply.

The relevant regulations set out obligations for operators of RIFs to notify participants of any deemed disposal of units, within a prescribed period of time.