739N Anti-avoidance: multiple funds further measures

Summary

The definition of PPIREF is wide reaching. Therefore, it was necessary to specifically provide that in certain circumstances where an IREF would be regarded as a PPIREF of a pension scheme, undertaking or company, it will not be. These exemptions only apply at the first level at which the test is applied (section 739M(3)(a)) and it is therefore possible that the second level test (section 739M(3)(b)) will cause a unit holding by a pension scheme, undertaking or company to fall back into the PPIREF regime.

Details

(1) If an IREF is a PPIREF in respect of a unit holder which itself is not under the influence of its unit holders (for example a widely held pension fund establishing an IREF), then that IREF will not be a PPIREF.

(2) If an IREF would only be regarded as a PPIREF of a unit holder because of an in specie contribution of assets as part of a scheme of amalgamation to which section 739D(8C) applied, then that IREF will not be an IREF.

(3) If an IREF would only be a PPIREF in respect of a unit holder because a person connected with the unit holder may select the IREF assets or influence the IREF business, but where that connected person cannot be influenced by or show any preference to that unit holder, then the IREF will not be a PPIREF.

(4) An IREF will not be treated as a PPIREF of a unit holder which is an IREF where the holding of the units is for bona fide commercial reasons and not part of a scheme or arrangement the main purpose of which is the avoidance of tax.

(5) Section 29(3) will not apply to the disposal of an asset which derives it value or greater part of its value directly or indirectly from units in an IREF

Relevant Date: Finance Act 2021