Explanatory note

These Regulations set out tax rules for a new type of investment fund, the Reserved Investor Fund (Contractual Scheme) (“RIF”), and its investors. In addition, they make minor changes to the tax rules for Co-ownership Authorised Contractual Schemes (“CoACS”), a similar type of investment fund.

Part 2 sets out supplementary qualifying conditions for a RIF (in addition to the conditions contained within section 20 of the Finance (No.2) Act 2024, entry and exit provisions, accounting provisions, information requirements, penalties for failure to give information or requisite notice and umbrella scheme provisions. A penalty under these regulations is determined in accordance with section 100 of the Taxes Management Act 1970 (c. 9).

Part 3 introduces further tax rules for RIFs mainly by amending existing primary legislation related to CoACS to extend the application of those provisions to RIFs or, where relevant, modifying the application of provisions applying to CoACS and RIFs, and in some cases making standalone provision for RIFs where no comparable provision is required for CoACS. The changes address issues that are relevant for RIFs, but also affect CoACS and ensure consistency of application between the two regimes.

Part 4 provides a transitional provision so that the changes introduced by these Regulations will only apply to authorised co-ownership schemes in respect of an accounting period which begins after the Regulations come into force.

A Tax Information and Impact Note covering this instrument was published on 6 March 2024 alongside the Spring Finance Bill 2024 and is available on the GOV.UK website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins. A supplementary Tax Information and Impact Note for this instrument will be published at the same GOV.UK website.