Section 739BA Personal portfolio investment undertaking
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Amendments
Section 739BA Inserted by Finance Act 2007 section 40(1)(a) as respects:
(a) the occurrence of a chargeable event in relation to an investment undertaking,
(b) the receipt by a person of a payment in respect of a material interest in an offshore fund,
(c) the disposal in whole or in part of a material interest in an offshore fund,
on or after 20 February 2007.
(1) In this section―
"investor" means―
(a) in relation to an investment undertaking, a unit holder in the investment undertaking who is an individual, and
(b) in relation to an offshore fund to which Chapter 4 applies, an individual who has a material interest in the offshore fund;
"land" has the same meaning as in section 730BA;
"material interest" shall be construed in accordance with section 743;
"offshore fund" has the meaning assigned to it by section 743;
"public" has the same meaning as in section 730BA.
What definitions are relevant for personal portfolio investment undertakings?
(1) This section defines a personal portfolio investment undertaking; this definition is then used in sections 739D, 747D and 747E to ensure that gains arising from offshore funds within this definition are taxed at that standard rate plus 23%, i.e.,...
(2) In this Chapter and in Chapter 4 of this Part "personal portfolio investment undertaking" means―
(a) in relation to an investor in an investment undertaking, an investment undertaking, and
(b) in relation to an investor in an offshore fund to which Chapter 4 applies, such an offshore fund,
under the terms of which some or all of the property of the undertaking or, as the case may be, the offshore fund, may be, or was, selected by, or the selection of some or all of the property may be, or was, influenced by―
(i) the investor,
(ii) a person acting on behalf of the investor,
(iii) a person connected with the investor,
(iv) a person connected with a person acting on behalf of the investor,
(v) the investor and a person connected with the investor, or
(vi) a person acting on behalf of both the investor and a person connected with the investor,
where "person connected" in this subsection means a person connected within the meaning of section 10.
How is "personal portfolio investment undertaking" defined?
(2) A personal portfolio investment undertaking is defined as an investment undertaking or an offshore fund in which the selection of the underlying property was influenced by you as the investor, a person acting on your behalf or a person connected ...
(3) For the purposes of subsection (2) and without prejudice to the application of that subsection, the terms of an investment undertaking or an offshore fund, as the case may be, shall be treated as permitting the selection referred to in that subsection where―
(a) the terms of such undertaking or offshore fund, or any other agreement between any person referred to in that subsection and such undertaking or offshore fund concerned―
(i) allow the exercise of an option by any person referred to in that subsection to make the selection referred to in that subsection,
(ii) give such undertaking or offshore fund discretion to offer any person referred to in that subsection the right to make the selection referred to in that subsection, or
(iii) allow any of the persons referred to in that subsection the right to request, subject to the agreement of such undertaking or offshore fund, a change in those terms such that the selection referred to in that subsection may be made by any of those persons,
or
(b) the investor is unable under those terms to select any of the property but any of the persons referred to in that subsection has or had the option of requiring such undertaking or offshore fund to appoint an investment advisor (no matter how such a person is described) in relation to the selection of the property.
(4) An investment undertaking or an offshore fund, as the case may be, is not a personal portfolio investment undertaking if―
(a) the only property which may be or has been selected satisfies the condition specified in subsection (5), and
(b) the terms under which such undertaking or offshore fund is offered meet the requirements of subsection (6).
(5) The condition specified in this subsection is that at the time when the property is or was available to be selected the opportunity to select―
(a) in the case of land, that property, and
(b) in any other case, property of the same description as the first-mentioned property,
is or was available to the public on terms which provide or provided that the opportunity to select the property is or was available to any person falling within the terms of the opportunity and that opportunity is or was clearly identified to the public, in marketing or other promotional literature published at that time by the investment undertaking or offshore fund concerned, as available generally to any person falling within the terms of the opportunity.
(6) The requirements of this subsection are that―
(a) the investment undertaking or offshore fund concerned does not subject any person to any treatment in connection with the opportunity which is different or more burdensome than any treatment to which any other person is or may be subject, and
(b) where the terms of the opportunity referred to in subsection (5) include terms―
(i) which set out the capital requirement of the opportunity and this requirement is identified to the public in the marketing or other promotional material published by the investment undertaking or offshore fund at the time the property is available to be selected, and
(ii) indicating that 50 per cent or more by value of the property referred to in that subsection is or is to be land,
then the amount any one person may invest in the investment undertaking or offshore fund shall not represent more than 1 per cent of the capital requirement (exclusive of any borrowings) of the opportunity as so identified.
