IFM40310 | Becoming a QAHC: introduction

FA22/SCH2/PT2

Requirements to become a qualifying asset holding company (QAHC)

Before a company can become a QAHC it must first:

• meet the required eligibility criteria (IFM40200+); and

• make an entry notification (IFM41260).

It may be possible for a company to enter the regime without meeting the ownership condition if all other eligibility conditions are met (IFM40320).

Accounting periods and rebasing

The QAHC regime provides tax benefits by modifying existing tax rules. For example, gains on disposals of certain shares that are normally chargeable to tax may be exempted. It is, therefore, necessary to separate the accounting periods in which a company is and is not a QAHC.

In order to achieve this separation, when a company becomes a QAHC, there are rules which:

• Require the beginning of a new accounting period (IFM40330);

• Deem certain assets as sold and reacquired at market value (IFM40330);

• Adjust the substantial shareholding exemption (SSE) rules in respect of accrued gains (IFM40340); and

• Ring fence assets within the QAHC (IFM40350).

There are similar rules to consider at the point at which a company ceases to be a QAHC (IFM40450) or where assets have been transferred to or from a group company (IFM40520).