The Co-ownership Contractual Schemes (Tax) Regulations 2025
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Change 1
13 UK property rich condition treated as met for initial period
(1) A co-ownership scheme that does not fall within paragraph (5) is to be treated for the purposes of these Regulations as meeting the UK property rich condition where the entry notice for that scheme— (a) includes a declaration that the scheme is relying on this regulation, (b) includes a declaration that the operator of the scheme intends and reasonably expects that the scheme will meet that condition before the end of a period of 12 months (“the 12 month period”) beginning with the date referred to in regulation 4(1)(b), and (c) sets out the steps that the operator of the scheme has taken, or will take, in order to meet that condition. (2) A co-ownership scheme may not rely on this regulation after the earlier of— (a) the end of the 12 month period, (b) the beginning of the day on which it becomes apparent to the operator of the scheme that there is no reasonable expectation of the RIF meeting the UK property rich condition within the 12 month period, or (c) the date on which the scheme meets the UK property rich condition or another restriction condition. (3) Where paragraph (2)(b) applies, the operator of the scheme must notify HMRC of that fact within a period of 30 days, beginning with the day on which that paragraph applies. (4) This regulation is treated as having never applied in relation to the scheme if a prohibited repayment of capital is made to a participant in the scheme at a time— (a) which is within the 12 month period, and (b) when, ignoring this regulation, the scheme would not meet the UK property rich condition. (5) A co-ownership scheme falls within this paragraph if the scheme— (a) has previously been a RIF, (b) has previously been an authorised contractual scheme, or (c) has participants that have been issued with units in the scheme in return for consideration other than money. (6) In paragraph (4), a “prohibited repayment of capital” means a payment, or accrual of an entitlement to a payment, from the assets of the scheme— (a) which represents, in substance, value derived (directly or indirectly) from a direct disposal of UK land or from the UK land component of an indirect disposal of UK land, (b) the amount of which does not fall to be taken into account for the purposes of income tax or corporation tax on income, and (c) some or all of the value which is represented by the amount does not fall to be taken into account for the purposes of income tax or corporation tax on income. (7) In paragraph (6)— (a) “direct disposal of UK land” and “indirect disposal of UK land” have the meanings given by paragraph 47(2) of Schedule 5AAA to TCGA 1992; (b) “the UK land component” has the meaning given by paragraph 21(4) of Schedule 5AAA to TCGA 1992.
13 UK property rich condition treated as met for initial period
(1) A co-ownership scheme that does not fall within paragraph (5) is to be treated for the purposes of these Regulations as meeting the UK property rich condition where the entry notice for that scheme— (a) includes a declaration that the scheme is relying on this regulation, (b) includes a declaration that the operator of the scheme intends and reasonably expects that the scheme will meet that condition before the end of a period of 12 months (“the 12 month period”) beginning with the date referred to in regulation 4(1)(b), and (c) sets out the steps that the operator of the scheme has taken, or will take, in order to meet that condition. (2) A co-ownership scheme may not rely on this regulation after the earlier of— (a) the end of the 12 month period, (b) the beginning of the day on which it becomes apparent to the operator of the scheme that there is no reasonable expectation of the RIF meeting the UK property rich condition within the 12 month period, or (c) the date on which the scheme meets the UK property rich condition or another restriction condition. (3) Where paragraph (2)(b) applies, the operator of the scheme must notify HMRC of that fact within a period of 30 days, beginning with the day on which that paragraph applies. (4) This regulation is treated as having never applied in relation to the scheme if a prohibited repayment of capital is made to a participant in the scheme at a time— (a) which is within the 12 month period, and (b) when, ignoring this regulation, the scheme would not meet the UK property rich condition. (5) A co-ownership scheme falls within this paragraph if the scheme— (a) has previously been a RIF, (b) has previously been an authorised contractual scheme, or (c) has participants that have been issued with units in the scheme in return for consideration other than money. (6) In paragraph (4), a “prohibited repayment of capital” means a payment, or accrual of an entitlement to a payment, from the assets of the scheme— (a) which represents, in substance, value derived (directly or indirectly) from a direct disposal of UK land or from the UK land component of an indirect disposal of UK land, (b) the amount of which does not fall to be taken into account for the purposes of income tax or corporation tax on income, and (c) some or all of the value which is represented by the amount does not fall to be taken into account for the purposes of income tax or corporation tax on income. (7) In paragraph (6)— (a) “direct disposal of UK land” and “indirect disposal of UK land” have the meanings given by paragraph 47(2) of Schedule 5AAA to TCGA 1992; (b) “the UK land component” has the meaning given by paragraph 21(4) of Schedule 5AAA to TCGA 1992.
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