The government has tabled amendments to the draft legislation contained in the Finance Bill introducing the new QAHC regime. The regime, which is due to come into force from 1 April 2022, confers wide-ranging tax benefits on QAHCs.
The amendments are technical, with the main change being to the "ownership condition". This is one of the requirements a company must meet to be a QAHC and, essentially, is met where the company is at least 70% owned by "good" investors". Those investors are called "category A investors" and include "qualifying funds".
Under the change, one of three categories of "qualifying fund" is to be replaced so that, instead of applying to a fund that, broadly, is "close" for tax purposes solely because of an investment in it by another category A investor, it instead applies to funds that are 70% controlled by category A investors. The other two categories of qualifying fund (collective investment schemes that satisfy a diversity of ownership test and non-close funds) remain the same. This change is consistent with the principle that QAHCs should be at least 70% owned by category A investors (as the previous test could generally be satisfied if there was majority ownership of the fund by Category A investors) but raises the bar slightly for meeting the ownership condition for certain fund types.
For more information on QAHCs please see our earlier briefing: Qualifying Asset Holding Company Regime | Travers Smith