Impact assessment

Qualifying Asset Holding Companies screening equality impact assessment

Published 6 April 2023

Project objectives

Finance Act 2022 introduced a new regime for the taxation of Qualifying Asset Holding Companies (QAHCs).

A QAHC must be at least 70% owned by diversely owned funds, or certain institutional investors, and its main activity must be the carrying out of an investment business. QAHCs facilitate the flow of capital, income and gains between investors and underlying investments, so that investors are taxed broadly as if they invested in the underlying assets. The QAHC pays no more tax than is proportionate to the activities it performs.

Customer groups affected

This measure is expected to have a negligible impact on Self Assessment (SA) customers and trusts who invest in a QAHC.

Individuals or trusts investing directly in a QAHC may benefit. For instance, they may be able to receive returns from that QAHC that are taxed as capital gains.

Customer experience is expected to remain broadly the same as this measure does not significantly alter how individuals interact with HMRC.

It is not anticipated that there will be impacts on groups sharing protected characteristics.

What customers will need to do

What customers need to do as a result of the change

Customers will have the ability to complete new sections relating to QAHCs on the following forms:

• changes to the Capital Gains Tax Summary form SA108, which is used to record capital gains and losses for the SA100 tax return. The changes on the SA108 are the addition of 3 boxes in a new QAHC section and include a new box for excluded indexed securities. The boxes are:

  • Box 1: total gains from the disposal of excluded indexed securities
  • Box 2: total gains from QAHC share repurchases and security redemptions
  • Box 3: total losses from QAHC share repurchases and security redemptions
• the new boxes will be numerical fields and can only be completed for tax years 2022 to 2023 onwards. The numerical fields are only relevant for the tax year of the return and need to be completed independently each year if applicable.
• changes to the residence, remittance basis etc form SA109, which is used to record residence and domicile status for the SA100 tax return. The changes on the SA109 are the addition of a new tick box, so that a customer can indicate if they have UK income or gains deemed to be foreign under the QAHC measure that are taxable on a remittance basis

• changes to the trust and estate capital gains form SA905, which is used to declare capital gains on the SA900 trust and estate tax return. The changes on the SA905 are the addition of three additional boxes in a new QAHC section and include a new box for excluded indexed securities. The boxes are:

  • Box 1: total gains from the disposal of excluded indexed securities - the amount before losses and reliefs
  • Box 2: total gains from QAHC share repurchases and security redemptions - the amount before losses and reliefs
  • Box 3: total losses from QAHC share repurchases and security redemptions

The new boxes will be numerical fields and can only be completed for tax years 2022 to 2023 onwards. The numerical fields are only relevant for the tax year of the return and need to be completed independently each year if applicable.

How customers will access this service

Access will be via the existing routes to complete the SA108, SA109 and SA905, which is currently via the On-Line Tax Return for Self Assessment (OTRSA) or paper forms

When customers need to do this

Customers will complete this as part of their annual Self Assessment tax return, within the existing timeframes

Assessing the impact

We assessed the equality impacts on all the protected characteristic groups in line with the Equality Act and Public Sector Equality Duty and section 75 of the Northern Ireland Act:

• racial groups
• disabled
• sex
• gender reassignment
• sexual orientation
• age
• religion or belief
• pregnancy and maternity
• marriage and civil partnership
• people with dependents and those without
• political opinion (for Northern Ireland only)
• people who use different languages (including Welsh language and British Sign Language).

There is no evidence to suggest any specific impacts on those customers within any of the protected characteristic groups listed above. The forms are available in accessible formats and in Welsh. Online guidance will be available. Extra support will be provided as required through regular business channels.

Opportunities to promote equalities

We have considered opportunities to promote equalities and good relations between people in each of the protected characteristic groups and those outside of that group.

No additional opportunities have been identified

A full equality impact assessment is not recommended.