The Co-ownership Contractual Schemes (Tax) Regulations 2025

Published: Tue 25th Feb 25 Came into force: Wed 19th Mar 25

Department: HM Treasury
Made under: Taxation of Chargeable Gains Act 1992

Established tax framework for Reserved Investor Funds while amending Co-ownership Authorised Contractual Schemes regulations, including qualifying conditions, reporting requirements, and enforcement mechanisms.

These regulations establish comprehensive tax rules for Reserved Investor Funds (RIFs) and modify existing regulations for Co-ownership Authorised Contractual Schemes (CoACS).

They set out qualifying conditions, entry and exit provisions, accounting requirements, information reporting obligations, and penalties for non-compliance.

The regulations also introduce amendments to various tax acts to accommodate RIFs and ensure consistent treatment with CoACS, while providing transitional provisions for existing schemes.

Arguments For

Provides a clear regulatory framework for a new type of investment fund (RIF), expanding investment options in the UK market
Creates consistency between RIF and CoACS regulations, simplifying compliance for fund operators
Includes robust investor protection measures through qualifying conditions and oversight requirements
Establishes clear reporting and information sharing requirements to ensure tax compliance
Offers flexibility through umbrella scheme provisions while maintaining regulatory control

Arguments Against

Introduces additional complexity to the tax system with new fund structures and requirements
Places significant compliance burden on fund operators through extensive reporting requirements
Imposes potentially substantial penalties for non-compliance with information requirements
May create operational challenges during transition period for existing schemes
Requires significant administrative overhead for monitoring and maintaining qualifying conditions

The Treasury make these Regulations in exercise of the powers conferred by section 103C of, and paragraph 48 of Schedule 5AAA to, the Taxation of Chargeable Gains Act 1992, section 41 of the Finance (No. 2) Act 2017 and section 20 of the Finance (No. 2) Act 2024.

The Treasury created these regulations under authority granted by multiple Acts of Parliament, specifically drawing power from tax legislation spanning from 1992 to 2024.

This establishes the legal basis for the regulations' creation and enforcement.

Part 1 - Preliminary matters

Citation and commencement

(1) These Regulations may be cited as the Co-ownership Contractual Schemes (Tax) Regulations 2025. (2) These Regulations come into force on 19th March 2025.

The regulations are officially titled the Co-ownership Contractual Schemes (Tax) Regulations 2025 and become effective March 19, 2025.

This section establishes the formal name and implementation date for the regulatory framework.

Part 2 - Reserved Investor Fund (Contractual Schemes): general

Chapter 1 - Interpretation 2. (1) In this Part [...definitions follow...]

Part 2 defines key terms and concepts used throughout the regulations regarding Reserved Investor Funds.

This ensures consistent interpretation and application of the rules by providing clear definitions for technical terms and concepts.

Explanatory Memorandum PDF View Source

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