SDLTM31310 | Co-Ownership Authorised Contractual Schemes (CoACS)

Authorised contractual schemes are a form of tax transparent fund that is an ‘authorised fund’ and a flexible alternative to unit trusts and open-ended investment companies. CoACSs were first introduced in 2013. They must be authorised by the Financial Conduct Authority (FCA) and the operator and depositary of a CoACS must also be an FCA authorised person.

The investors in a CoACS have interests in scheme property, as tenants-in-common, with the interest being held by the depository on their behalf. The CoACS is essentially a contract entered into by the investors and the depository of the fund.

References to a CoACS are treated as including EEA collective investment schemes that are equivalent to a UK CoACS.

For the purposes of SDLT, a CoACS is treated as a company, with the rights of investors as shares in the company. This means that SDLT is not charged on the buying of units in the scheme, but (without a claim to seeding relief), SDLT is charged when an investor transfers property into a scheme in exchange for units, or where the CoACS acquires property from a third party.

A CoACS is not however treated as a company for the purposes of group, reconstruction or acquisition reliefs.

More information about CoACSs can be found in the Investment Funds Manual at IFM08000