Section 103DC — Taxation of Chargeable Gains Act 1992: Co-ownership schemes which are to be treated as partnerships

Co-ownership schemes which are to be treated as partnerships 103DC 1 The assets of a co-ownership scheme, which is not a tax transparent fund or an offshore collective investment vehicle, are treated for the purposes of tax in respect of chargeable gains as held by the participants in the scheme as partners.

2 Any dealings by the operator of a such a scheme are treated for those purposes as dealings by the participants in the scheme in partnership.

3 If a participant is entitled to an allowance under Part 2A of CAA 2001 (structures and buildings allowances) by reference to expenditure in relation to their interest in such a scheme, that allowance is not to be disregarded for the purposes of the application of section 37B (exclusion of certain expenditure: structures and buildings allowances) in relation to a disposal of their interest.

4 Where—

a expenditure has been made in respect of the assets of such a scheme, and b a capital allowance or renewals allowance (within the meaning of section 41(4) or (5)) has been given to a participant in the scheme in relation to that expenditure, the capital allowance or renewals allowance that was given to the investor is to be excluded from the sums allowable as a deduction in computing the amount of a loss accruing to the participant in relation to a disposal of their interest in the assets of the scheme.

5 Subsections (6) and (7) apply for the purposes of this Act at any time that a co-ownership scheme, which is not a tax transparent fund or an offshore collective investment vehicle, becomes an authorised contractual scheme or a Reserved Investor Fund (Contractual Scheme) (a “relevant scheme” ).

6 Each participant in the co-ownership scheme is deemed to, immediately before the time that the scheme becomes a relevant scheme, have sold their interest in the assets held by the participants in the scheme as partners at its market value at that time.

7 Each participant is treated as having acquired their units in the relevant scheme—

a at the time the co-ownership scheme becomes a relevant scheme, and b at their market value at that time.

8 For the purposes of this section, a participant’s interest in the assets held by the participants of a co-ownership scheme as partners is a just and reasonable proportion of the assets having regard to the participant’s units in the scheme.

9 In this section— “ offshore collective investment vehicle ” has the meaning it has in Schedule 5AAA (see paragraph 2 of that Schedule); “ tax transparent fund ” has the meaning it has in section 103D.

10 In subsection (1), the reference to the assets of a co-ownership scheme is a reference to assets which are subject to the scheme.