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Taxes Consolidation Act, 1997 (Number 39 of 1997)

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835AVB. Collective investment scheme

(1) In this section—

‘beneficial owner’, in relation to an undertaking, is any individual who is a beneficial owner within the meaning of—

(a) the Investment Limited Partnerships Act 1994, or

(b) the Investment Funds, Companies and Miscellaneous Provisions Act 2005,

and in applying this Chapter to a relevant partnership the beneficial owner of the partnership shall be identified in the same manner as the beneficial owner of an investment limited partnership is identified;

collective investment scheme” means a relevant investment undertaking—

(a) that is widely held, and

(b) which holds a diversified portfolio of assets;

relevant AIFM” means an AIFM, within the meaning of the European Union (Alternative Investment Fund Managers) Regulations 2013 (S.I. No. 257 of 2013), authorised under those Regulations;

relevant investment undertaking” means—

(a) a common contractual fund, within the meaning of section 739I,

(b) an investment limited partnership, within the meaning of section 739J, or

(c) a relevant partnership,

but where the undertaking referred to in paragraph (a) or (b) is an umbrella scheme, within the meaning of section 739B, it shall mean a sub-fund of that undertaking;

relevant partnership” means—

(a) a partnership, or

(b) a limited partnership under the Limited Partnerships Act 1907,

the affairs of which are managed by a relevant AIFM and which has been established under the law of the State.

(2) For the purposes of the definition of ‘collective investment scheme’ in subsection (1), a relevant investment undertaking is widely held where there is no beneficial owner of that undertaking.

(3) Subject to subsection (4), for the purposes of determining whether a relevant investment undertaking holds a diversified portfolio of assets, regard shall be had to—

(a) the nature of the assets held by the relevant investment undertaking,

(b) the extent to which the relevant investment undertaking is exposed to the risks and rewards of different classes of assets (whether directly or indirectly),

(c) the number of investments made by the relevant investment undertaking,

(d) the means through which the investment objective of the relevant investment undertaking is to be achieved, as set out in its prospectus, and

(e) where the assets held are derivatives, the assets to which the derivatives give exposure.

(4) A relevant investment undertaking shall not be determined to hold a diversified portfolio of assets—

(a) in a case in which the undertaking holds securities, where more than 10 per cent of those securities are issued by a single issuer, or

(b) in a case in which the undertaking holds land, unless the undertaking holds 3 or more properties and the market value of each of those properties is less than 40 per cent of the total market value of the properties held.

(5) In a case in which a relevant investment undertaking, having satisfied the conditions in paragraphs (a) and (b) of the definition of ‘collective investment scheme’ in subsection (1), ceases to satisfy one or both of those conditions, the relevant investment undertaking will be treated as satisfying those conditions where it would be reasonable to consider that the failure to satisfy the condition was temporary, inadvertent and unavoidable at the time the condition ceased to be satisfied, having regard to—

(a) the means through which the investment objective of the relevant investment undertaking is to be achieved, as set out in its prospectus,

(b) the date or dates on which the condition ceased to be satisfied,

(c) the circumstances giving rise to the condition ceasing to be satisfied,

(d) the steps taken, if any, to ensure the condition is satisfied and the date or dates on which it is satisfied, and

(e) the steps taken, if any, to prevent the circumstances, referred to in paragraph (c), reoccurring.

(6) In a case in which a relevant investment undertaking, has not satisfied the conditions in paragraphs (a) and (b) of the definition of ‘collective investment scheme’ in subsection (1), the relevant investment undertaking will be treated as satisfying those conditions where it would be reasonable to consider that the conditions will be satisfied within 24 months of the date on which the undertaking makes its first investment, and that the failure to satisfy the conditions is temporary, inadvertent and unavoidable, having regard to—

(a) the means through which the investment objective of the relevant investment undertaking is to be achieved, as set out in its prospectus,

(b) the circumstances giving rise to the condition not being satisfied, and

(c) the steps taken, if any, to ensure the condition will be satisfied.

(7) In a case in which a relevant investment undertaking, having satisfied the conditions in paragraphs (a) and (b) of the definition of ‘collective investment scheme’ in subsection (1), ceases to satisfy one or both of those conditions, the relevant investment undertaking will be treated as satisfying those conditions where—

(a) the failure to satisfy the condition is due to the commencement of the winding down of the relevant investment undertaking, and

(b) the date on which the winding down is completed is less than 12 months after the date on which the condition first ceased to be satisfied as a result of the winding down.

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Inserted by FA21 s30(1)(f). Comes into operation on 1 January 2022.