Taxes Consolidation Act 1997 section 732

Special arrangements for qualifying unit trusts

Section 732 provides for a reduced capital gains tax rate for qualifying unit trusts with substantial public participation, ensuring that small investors are not disadvantaged by investing through a unit trust rather than directly in quoted securities.

• A qualifying unit trust must be registered under the Unit Trusts Act 1972, have trustees resident in the State, publish unit prices regularly, and have units of equal value carrying equal rights.
• Chargeable gains accruing to a qualifying unit trust, and gains arising on the disposal of qualifying units by individuals or companies, are taxed at half the normal CGT rate.
• At least 80% of units must be held by the general public, there must be at least 50 unitholders, no single holder (including connected persons) may hold more than 5% of units, at least 80% of trust assets must be quoted securities, and no more than 15% may be invested in any one company.
• This section does not apply to collective investment undertakings within section 734(7).