Unit trust schemes are collective investment vehicles used to hold assets, including land, on behalf of unit holding investors.
For LBTT purposes, unit trusts (including unauthorised unit trusts) are treated as companies and are therefore subject to LBTT when they first acquire a land asset, but not each time new unit holders acquire rights within the unit trust. A unit trust scheme is treated as if the scheme trustees were a company and the rights of the unit holders were shares in the company.
Each part of an umbrella scheme is regarded as a separate unit trust scheme. An umbrella scheme means a unit trust scheme that provides arrangements for separate pooling of participants’ contributions and the profits or income, out of which payments are to be made for them and under which the participants are entitled to exchange rights in one pool for rights in another. A part of an umbrella scheme refers to the arrangements that relate to a separate pool.
A unit trust scheme has the same meaning as in the Financial Services and Markets Act 2000 and a unit holder means a person entitled to a share of the investments subject to the trusts of a unit trust scheme.
Section 620 of the Corporation Tax Act 2010 (court investment funds treated as authorised unit trusts) applies to the LBTT(S)A 2013, substituting references to an authorised unit trust with references to a unit trust scheme.
A unit trust scheme is not to be treated as a company for the purpose of group relief, reconstruction relief or acquisition relief.