SAIM6170 - Collective investment schemes: unauthorised unit trusts: enterprise zone schemes: tax definition
Definition of an Enterprise Zone Property scheme
The characteristics of an Enterprise Zone Property scheme are set out in Regulation 4 of the Income Tax (Definition of Unit Trust Scheme) Regulations 1988 (SI988/267), and apply to schemes established on or after 18 February 1988.
Assets must consist of land and buildings
The assets must consist only of land (including buildings on the
land) wholly or substantially in an enterprise zone though there is
provision for land outside the boundary which adjoins land within
the boundary. Cash may also be held but only if held temporarily
pending acquisition of property or distribution or in connection
with the management of the scheme.
From 31 March 1992, the assets may also include land which
was formerly situated in an enterprise zone where the buildings on
that land were constructed and the construction expenditure was
incurred (or incurred under a contract entered into) during the
life of the zone. This covers the situation where buildings in an
expired zone are purchased but the buildings fully qualify for
enterprise zone allowance.
Investors’ contributions must be the purchase of interests in land and buildings
The contributions of the investors may only be expended on the construction or purchase of interests in buildings or structures which qualify for relief under Chapter I of Part I Capital Allowances Act 2001, integral plant and machinery and the land itself, though expenditure on incidental matters is also permitted.
Terms of the scheme
The terms of the scheme must be that
- all the contributions must be made and the expenditure must be incurred in a single year;
- all investors have the same rights;
- there is no redemption etc facility other than by way of distribution of capital to all the investors;
- the trustee is to undertake certain responsibilities and to provide certain information to the Inspector dealing with the scheme.
