Regulation 8 Non-close condition

(1)

A co-ownership scheme meets the non-close condition at any time that were it a company—

(a)

it would not be a close company in accordance with the rules in Chapter 2 of Part 10 of CTA 2010^f1, or

(b)

it would be a close company, but only because it has a qualifying investor as a direct participator or indirect participator.

(2)

For the purposes of considering whether a co-ownership scheme meets the non-close condition under paragraph (1), the rules in Chapter 2 of Part 10 of CTA 2010 are to be applied as if—

(a)

the scheme were a company,

(b)

the rights of the participants in the scheme were shares in the company, and

(c)

the modifications to the rules set out in paragraphs (a) to (e) of paragraph 46(2) of Schedule 5AAA to TCGA 1992^f2 applied, but as if the reference in paragraph (e) to the greater part of the voting power were a reference to 50% or more of the voting power.

(3)

In paragraph (1)(b), the following terms have the meaning given by paragraph 46 of Schedule 5AAA to TCGA 1992^f3—

(a)

“direct participator”;

(b)

“indirect participator”;

(c)

“qualifying investor”.

Annotations

Footnotes

f1: Relevant amendments were made by paragraph 156 of Schedule 4 to the Co-operative and Community Benefit Societies Act 2014 (c. 14).
f2: Relevant amendments were made by S.I. 2020/315.
f3: Relevant amendments were made by paragraph 4 of Schedule 7 to the Finance Act 2024 (c. 3).