Commentary

C2.1172 Exemption for disposals by companies wholly owned by certain types of investors

Capital gains tax
Capital gains tax | Commentary

C2.1172 Exemption for disposals by companies wholly owned by certain types of investors

Capital gains tax | Commentary

C2.1172 Exemption for disposals by companies wholly owned by certain types of investors

Investments in funds are often made by institutional investors (such as pension funds) through feeder vehicles, such as wholly owned holding companies. Such holding companies would, in the absence of special provisions, be potentially subject to tax on gains on the disposals of interests in qualifying funds or qualifying companies that they hold an investment in. However, an exemption is available provided the company is wholly (or almost wholly) owned by one or more specific type of investors, as listed below, and is disposing of units in a prescribed type of fund.

The exemption applies to disposals of units in one of the following types of funds1:

  1.  

    •     a CIV in respect of which a transparency election has been made (a 'transparent fund')

  2.  

    •     a qualifying fund or qualifying company in respect of which an exemption election has been made

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