Section 36 | Anti-avoidance: collective investment scheme reconstructions

(1)TCGA 1992 is amended as follows.

(2)In section 103G (exchange of units for those in another collective investment scheme), in subsection (4), for “section 103K(1)” to the end of the subsection substitute “section 103K (anti-avoidance)”.

(3)In section 103H (scheme of reconstruction involving issue of units), in subsection (5), for “section 103K(1)” to the end of the subsection substitute “section 103K (anti-avoidance)”.

(4)In section 103I (scheme of reconstruction involving conversion scheme), in subsection (4), for “section 103K(1)” to the end of the subsection substitute “section 103K (anti-avoidance)”.

(5)In section 103K (restriction on application of sections 103G, 103H and 103I)—

(a)at the end of the heading insert “: anti-avoidance”;

(b)for subsection (1) substitute—

(1)This section applies in respect of arrangements relating to an exchange or scheme of reconstruction as regards which section 103G, 103H or 103I applies if the main purpose, or one of the main purposes, of the arrangements is to reduce or avoid liability to capital gains tax, corporation tax or income tax.

(1A)Any such reduction or avoidance that would (in the absence of this section) arise from such arrangements is to be counteracted by the making of such adjustments as are just and reasonable (in light of the reduction or avoidance).

(1B)This includes, in an appropriate case, disapplying section 103G, 103H or 103I insofar as is required to counteract the reduction or avoidance.

(1C)Any adjustments required to be made under this section (whether or not by an officer of Revenue and Customs) may be made by way of—

(a)an assessment, or

(b)the modification of an assessment.

;

(c)omit subsections (2) and (3);

(d)in subsection (4)—

(i)for “subsection (1) above” substitute “this section”;

(ii)in paragraph (a), after “chargeable participant” insert “as part of the exchange or scheme of reconstruction”;

(e)after subsection (6) insert—

(7)In this section, “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

(6)The amendments made by this section have effect in relation to arrangements involving an issue of units in a collective investment scheme on or after 26 November 2025.

(7)But those amendments do not have effect in a case where—

(a)a participant in a collective investment scheme has made an application under section 138(1) of TCGA 1992 (as applied by section 103K(6) of that Act) before 26 November 2025,

(b)the Commissioners for His Majesty’s Revenue and Customs have notified the participant of their satisfaction, or the tribunal has notified the participant of its satisfaction, in relation to the application under section 138(1) or (4) of TCGA 1992, and

(c)the issue of units in a collective investment scheme in respect of which the application was made occurs before 26 January 2026 or, if later, before the end of the period of 60 days beginning with the day on which the notification mentioned in paragraph (b) was made.