Revenue Note for Guidance

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Revenue Note for Guidance

739M Anti-avoidance: multiple funds

Summary

This section defines a ‘personal portfolio IREF’ and the implications for certain pension schemes, investment undertakings or life assurance companies of holding units in a personal portfolio IREF. A PPIREF, in respect of a unit holder, is an IREF which is controlled or directed by that unit holder.

Details

(1) A PPIREF is an IREF under the written or implied terms of which the selection of the IREF assets or the conduct of the IREF business may be influenced by the unit holder. In order to prevent the unit holder’s power to influence the IREF being cloaked, an IREF will also be a PPIREF if the ability to influence the IREF rests with:

  1. a person acting on behalf of the unit holder,
  2. a person connected (within the meaning of section 10) with the unit holder,
  3. a person connected with a person acting on behalf of the unit holder,
  4. the unit holder and a person connected with the unit holder, or
  5. a person acting on behalf of both the unit holder and a person connected with the unit holder.

(2) A number of situations are deemed to be the terms of the IREF permitting the unit holder, or one of the wider group of persons to whom subsection (1) applies, to select the IREF assets or influence the IREF business.

(3) Whether or not an IREF is a PPIREF of a pension scheme, investment undertaking or life assurance company is relevant to determining whether or not that pension scheme, undertaking or company is a specified person or not. The test as to whether or not the pension scheme, undertaking or company is a specified person is applied at two levels.

  1. is the IREF a PPIREF of the pension scheme, undertaking or company, or, if it is not,
  2. is the business of the pension scheme, undertaking or company, in respect of its ownership of the units in the IREF, selected or influenced by its unit holders, and it would be reasonable to consider that the investment in the IREF by the pension scheme, undertaking or company was not for the purpose of avoiding tax under this Chapter.

Relevant Date: Finance Act 2019