IFM16220 - Exchanges, mergers, schemes of reconstruction: collective investment schemes: exchange of units for those in another Collective investment scheme

Section 103G Taxation of Chargeable Gains Act 1992

This section applies in two cases where investors in CIS바카라 사이트˜A바카라 사이트™ exchange units for new units in CIS 바카라 사이트˜B바카라 사이트™.

Case 1

Where units in 바카라 사이트˜B바카라 사이트™ are issued as the result of a general offer which fulfils two conditions:

  • It is made either to all investors in 바카라 사이트˜A바카라 사이트™ or to all those holding units of a particular class.
  • As a result of the exchanges, the property subject to CIS 바카라 사이트˜B바카라 사이트™ includes units in CIS 바카라 사이트˜A바카라 사이트™ giving rights to more than 50% of the capital and more than 50% of the income of 바카라 사이트˜A바카라 사이트™.

Case 2

Where under an arrangement:

  • investors exchange units in 바카라 사이트˜A바카라 사이트™ for units in 바카라 사이트˜B바카라 사이트™ which have substantially the same value, and
  • As a result of the exchanges, at least 85% of the property held by 바카라 사이트˜B바카라 사이트™ is constituted by units in 바카라 사이트˜A바카라 사이트™.

If either Case 1 or Case 2 applies, chargeable gains rules apply as if CIS 바카라 사이트˜A바카라 사이트™ and CIS 바카라 사이트˜B바카라 사이트™ were Β the same company and units were shares - see CG51700C. In summary, the exchange of units in 바카라 사이트˜A바카라 사이트™ for units in 바카라 사이트˜B바카라 사이트™ is treated as not a disposal for chargeable gains purposes and the 바카라 사이트˜B바카라 사이트™ units are treated as having been acquired at the same time as the original 바카라 사이트˜A바카라 사이트™ units.

Where an interest in units in a non-reporting offshore fund is exchanged or treated as exchanged for an asset which is not an interest in a non-reporting offshore fund, there is a disposal of the interests in the non-reporting offshore fund for a consideration equal to their market value at the time of the exchange. See IFM13284 (corporation tax payers) and IFM13386 & IFM13388 (income tax payers).

Section 103G may be in point where a PAIF (property authorised investment fund) makes an offer for an AUT (authorised unit trust) invested in property investments.

Section 103G only applies where the arrangements take place for bona fide commercial reasons and not for the avoidance of tax바카라 사이트“ see IFM16260.