SDLTM24735 | Restriction on Relief

Seeding relief is not available unless the fund has arrangements requiring the vendor to give notice to the ‘authorised corporate director’ in the case of a PAIF, or scheme operator in the case of CoCS of:

• the identity of the beneficial owner of the units received in respect of a chargeable transaction subject to seeding relief, and

• any disposal of such units in the PAIF/CoCS on or after the effective date of that transaction, by any of those beneficial owners, which could constitute a relevant disposal. See SDLTM24770 .

Seeding relief is not available if at the effective date of the transaction, arrangements are in place under which a disposal of units by the vendor could constitute a ‘relevant disposal’.

Seeding relief is not available if a transaction is not effected for legitimate commercial reasons or if it is part of arrangements where the main purpose or one of the main purposes is to avoid tax. ‘Tax’ for these purposes means Stamp Duty, Income Tax, Corporation Tax, Capital Gains Tax, or SDLT.