# The Income Tax (Pension Funds Pooling Schemes) Regulations 1996, Regulation 4: Description of a pension funds pooling scheme


(1) Subject to paragraph (2), a unit trust scheme is a pension funds pooling scheme at any time if at that time it has the characteristics specified in paragraph (3).
(2) A unit trust scheme which at any time in a tax year, or at the end of a tax year, ceases to have the characteristics specified in paragraph (3) is not a pension funds pooling scheme as regards that year.
(3) The characteristics specified in this paragraph are that—
(a) subject to regulation 9(10) and (11), each participant in the scheme is—
(i) an exempt approved scheme, or
(ii) a superannuation fund, or
(iii) an overseas scheme;
(b) each participant in the scheme has been approved by the Board in accordance with regulation 7 as eligible to participate in the scheme and, subject to regulation 9(10) and (11), that approval has not subsequently been revoked or withdrawn under regulation 7(8) or (9);
(c) all the participants in the scheme are jointly absolutely entitled as against the trustee of that scheme, within the meaning of section 60 of the 1992 Act, to the scheme property;
(d) subject to paragraph (4), the scheme property consists of any or all of the following—
(i) land;
(ii) buildings or structures on land;
(iii) shares, stock or other investments which are the subject of transactions falling within subsection (12) of section 127 of the Finance Act 1995 (read with subsection (13) of that section);
(iv) investments comprising futures contracts or options contracts relating to land (including contracts falling within subsection (13) of that section);
(e) except as provided in paragraph (5), the contributions of the participants are expended on any or all of the following—
(i) the acquisition of, or of rights in or over, land, or the management or development of that land;
(ii) the acquisition or construction of, or the purchase of interests in, buildings or structures on land, or the management or development of those buildings or structures;
(iii) the provision of machinery or plant which is an integral part of those buildings or structures, or the management, alteration or improvement of that machinery or plant;
(iv) the making of any investments falling within sub-paragraph (d)(iii) or (iv) above, or the management of those investments;
(f) where expenditure falling within sub-paragraph (e) is expenditure in respect of which an allowance under the 1990 Act is to be, or may be, made, the terms of the scheme secure that the conditions specified in regulation 5 (read with regulation 6) are satisfied;
(g) the terms of the scheme secure that no participant has rights or interests in any part of the scheme property that are different in nature from the rights or interests which any other participant has in that part of the scheme property;
(h) the terms of the scheme secure that, in relation to any arrangements which are entered into on or after the date of coming into force of these Regulations—
(i) a participant is obliged to give to the trustee of the scheme, in the situation described, and within the period of time specified, in paragraph (1) of regulation 8, the notification specified in that regulation;
(ii) the trustee of the scheme is irrevocably authorised and obliged to undertake on behalf of the participants the responsibilities specified in regulation 10 and the duties specified in regulations 9 and 11;
(j) the trustee of the scheme has given notice to the Board electing for the scheme to be treated, pursuant to these Regulations, the Capital Gains Tax (Pension Funds Pooling Schemes) Regulations 1996, and the Stamp Duty and Stamp Duty Reserve Tax (Pension Funds Pooling Schemes) Regulations 1996, as not being a unit trust scheme for the purposes specified in each of the Regulations.
(4) A unit trust scheme is a pension funds pooling scheme notwithstanding that the scheme property at any time consists wholly or partly of—
(a) cash held temporarily by the trustee that is subsequently expended as mentioned in sub-paragraph (e) of paragraph (3), or for purposes incidental to, or arising out of, any of the expenditure referred to in that sub-paragraph,
(b) cash held temporarily by the trustee that is subsequently expended in making payment to a participant or former participant in the scheme following the redemption, purchase or cancellation of any of the rights or interests of that participant or former participant in the scheme property,
(c) cash held temporarily by the trustee that is subsequently expended by way of distribution to the participants generally,
(d) cash held temporarily by the trustee that is subsequently expended on the management of the scheme, or the management or development of the scheme property,
(e) cash held temporarily by the trustee that is subsequently expended on the acquisition or maintenance of assets falling within sub-paragraph (f) below, or
(f) other assets held by the trustee in connection with the management of the scheme, or the management or development of the scheme property.
(5) A unit trust scheme is a pension funds pooling scheme notwithstanding that the contributions of the participants are expended—
(a) for purposes incidental to, or arising out of, the expenditure referred to in paragraph (3)(e),
(b) for any of the purposes mentioned in sub-paragraphs (a) to (e) of paragraph (4), or
(c) on the acquisition or maintenance of assets falling within sub-paragraph (f) of that paragraph.
(6) In this regulation—
“management” includes insurance, repair and maintenance;
“development” includes alteration or improvement.

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Source: https://www.legislation.gov.uk/uksi/1996/1585/regulation/4 (the official version)
Page: https://openlegislation.uk/income-tax-pension-funds-pooling-schemes-regulations-1996/regulation-4
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.