# Taxation of Chargeable Gains Act 1992, Paragraph 46

Extent: E+W+S+N.I.

(1) This paragraph has effect for the purposes of the provisions of this Schedule which apply this paragraph (or to which this paragraph is applied).
(2) Whether a company is “a close company” is determined in accordance with the rules in Chapter 2 of Part 10 of CTA 2010 but subject to the following modifications—
(a) section 442(a) (non-UK resident companies) is to be treated as omitted,
(b) section 444 (companies involved with non-close companies) is to be treated as omitted,
(c) section 447(1)(a) (shares in quoted companies beneficially held by non-close companies) is to be treated as omitted, ...
(d) for the purposes of any attribution under section 451(4) (rights of a person's associates to be attributed to the person etc in determining “control”) the rights and powers of a person (“A”) are not to be attributed to another person (“P”) merely because A is a partner of P, and
(e) a company (“C”) is not to be regarded as a close company only because a person possesses or is entitled to acquire the greater part of the voting power in C as a result of being—
(i) a manager of a collective investment vehicle, or
(ii) a general partner in a limited partnership which is a collective investment scheme.
(3) A “qualifying investor” means—
(a) a person who is within any of section 528(4A)(i) or (j) of CTA 2010 where, if the collective investment vehicle mentioned in the provision concerned is a company, it meets the non-close condition or, if not, the vehicle meets the genuine diversity of ownership condition,
(b) a person who is within any other provision of section 528(4A) of that Act, or
(c) a qualifying fund or qualifying company in respect of which an election under paragraph 12 has effect.
(4) For the purposes of sub-paragraph (3)(a) a collective investment vehicle meets the genuine diversity of ownership condition at any time if, at that time—
(a) the vehicle meets or, if the vehicle is part of multi-vehicle arrangements, the arrangements meet the conditions in regulation 75(2), (3) and (4)(a) of the Offshore Funds (Tax) Regulations 2009, or
(b) the vehicle meets, or those multi-vehicle arrangements meet, the condition in regulation 75(5) of those Regulations, (assuming for this purpose that regulation 75(4)(b) is omitted).
...
(4A) For the purposes of sub-paragraph (4), those Regulations have effect as if references to a fund included—
(a) multi-vehicle arrangements, and
(b) a collective investment vehicle which is not an offshore fund.
(5) For the purposes of sub-paragraph (3)(a) a company meets the non-close condition at any time if, at that time, it—
(a) is not a close company, or
(b) is a close company but only because it has a qualifying investor as a direct or indirect participator,
applying the provisions of this paragraph for the purposes of this sub-paragraph.
(6) A person is a “direct participator” if the person is a participator for the purposes of Part 10 of CTA 2010 (see section 454).
(7) A person is an “indirect” participator in a company if the person has a share or interest in the capital or income of the company through another body corporate or other bodies corporate.
(8) The reference here to having a share or interest in the capital or income of a company through a body corporate is to be read as follows.
(9) Suppose that 3 or more bodies corporate are ordered in a series such that each body in the series (other than the last) has a share or interest in the capital or income of the body immediately below it in the series.
(10) If B is a body that is below, but not immediately below, A in the series, A is said to own a share or interest in the capital or income of B through each body corporate that is between A and B in the series.
(11) A person is regarded for the purposes of sub-paragraphs (7) to (10) as having a share or interest in the capital or income of a company if the person would be a participator in the company as a result of section 454(2) of CTA 2010.
(12) For the purposes of this paragraph any reference to a body corporate includes—
(a) an offshore collective investment vehicle which is, as a result of paragraph 4, assumed to be a company for the purposes of this Schedule, and
(b) anything else which is, as a result of provision made elsewhere by this Act, assumed to be a company for the purposes of this Act.

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Source: https://www.legislation.gov.uk/ukpga/1992/12/schedule/5AAA/paragraph/46 (the official version)
Page: https://openlegislation.uk/taxation-of-chargeable-gains-act-1992/schedule-5AAA/paragraph-46
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.