QAHC Regime
Qualifying criteria
To qualify as a QAHC, a company must satisfy each of the criteria:
- It has made (and not rescinded) a decision to be treated as a QAHC.
- It must be a UK tax resident; it can however be incorporated in other jurisdictions.
- It must not be a UK Real Estate Investment Trust (REIT).
- None of its equity securities are publicly listed or traded.
- Its main activity is the carrying on of investment business. Any other activities of the company must be both ancillary to the carrying on of that business and not carried on to a substantial extent (the “Activity condition”).
- Its investment strategy does not involve the acquisition of listed or traded securities (or interests deriving their value from them), unless the acquisition is made for the purposes of facilitating a change of control which will result in the securities ceasing to be listed or traded.
- The sum of ‘relevant interests’ in the QAHC held by investors who are not ‘Category A’ investors (such as investment funds and various types of institutional investor (e.g. most pension funds and many insurance businesses)) does not exceed 30%. Put another way, at least 70% of the QAHC must be owned by ‘Category A investors’ (the “ownership condition”).
Ownership condition:
Category A investors include a range of institutional investors such as most pension funds, charities and authorised long-term insurance businesses. Investment funds that are “qualifying funds” are also Category A investors. Broadly, these are (i) “collective investment schemes” (CISs) or “alternative investment funds” (AIFs) for regulatory purposes that either are not close or are 70% controlled by Category A investors, and (ii) CISs that meet certain requirements as to diverse ownership (such as UK and non-UK REITs).
A person will be considered to have a ‘relevant interest’ in a QAHC if, due to a direct or indirect interest, they are:
- beneficially entitled to a proportion of the profits available for distribution to equity holders of the QAHC;
- beneficially entitled to a proportion of the assets of the QAHC available for distribution to its equity holders on a winding up; or
- have a proportion of the voting power of the QAHC.
Where there are different classes of securities tracking specific profits or assets, a similar test will be applied to those classes of interest but excluding the voting power test.
Aztec Group is authorized to provide financial services in the jurisdictions in which it operates.
© 2024 Aztec Group.