Explanatory note

These Regulations provide for certain unauthorised unit trust schemes to be excepted from the definition of unit trust scheme for the purposes of capital gains tax given by section 92(1)(a) of the Capital Gains Tax Act 1979 (“section 92(1)(a)”). As substituted by section 40(3) of the Finance Act 1987, that section provides that “unit trust scheme” is to have the same meaning as in the Financial Services Act 1986. Two types of unit trust scheme are excepted from the definition in section 92(1)(a) by these Regulations: limited partnership schemes and approved profit sharing schemes. In the case of limited partnership schemes the liability of the trustees and unit holders for the purposes of capital gains tax will accord with the legal nature of the relationship between them, as established by the terms of the scheme. Approved profit sharing schemes will be taxed in accordance with section 53(5) of the Finance Act 1978.

Regulation 1 provides for the title and commencement.

Regulation 2 contains definitions.

Regulation 3 provides that limited partnership schemes and approved profit sharing schemes are to be excepted from the definition of “unit trust scheme” in section 92(1)(a).

Regulation 4 describes a limited partnership scheme.