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YC 11: No look-through rule for companies in certain cases
or “When a company's ownership of another company isn't traced back to its shareholders”
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“Rules for treating ownership in public unit trusts”

This part of the law is about public unit trusts. If a public unit trust wants to, it can use special rules. These rules change how we think about who owns parts of the trust.

When using these rules, we pretend that all the unit holders’ shares are owned by one imaginary person. This imaginary person isn’t a company. It exists as long as the trust does and only owns shares in the trust.

If you own part of something that a public unit trust has invested in, you can choose to treat the trust’s ownership differently. You can ignore section YC 4 and use these special rules instead.

For trusts that existed on the first day of the 2001-02 tax year and chose to use an old rule (section OD 5(5B) of the Income Tax Act 1994), there’s an extra step. We pretend the imaginary person has always existed. This affects how we count the trust’s tax credits and losses from the start of that tax year.

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Next up: YC 13: Corporate spin-outs

or “Rules for splitting a company into two separate entities”
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Part Y Definitions and related matters
Measurement of company ownership

YC 12Public unit trusts

  1. Subsections (2) to (4) apply in relation to a public unit trust if the public unit trust chooses to apply them.

  2. A person in which a public unit trust holds an ownership interest may choose, when determining the holders of ownership interests in the person, to treat section YC 4 as not applying to the public unit trust as a shareholder company for the person and to treat the ownership interest as being held in the way described in subsection (2).

  3. The unit holders’ shares in the unit trust are treated as held by a notional single person that—

  4. is not a company; and
    1. exists as long as the unit trust exists; and
      1. holds nothing other than the shares in the unit trust.

        1. Subsection (4) applies if—

        2. a public unit trust exists on the first day of the 2001–02 tax year; and
          1. the public unit trust chose to apply section OD 5(5B) of the Income Tax Act 1994 from the first day of the tax year.

            1. The notional single person is treated as having accumulated and as having always existed in relation to the balances, at the start of the 2001–02 tax year, of the unit trust’s—

            2. imputation credit account:
                1. loss balances.

                  Compare
                  Notes
                  • Section YC 12(1) heading: replaced (with effect on 1 April 2008), on , by section 280(1) (and see section 280(3) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                  • Section YC 12(1): replaced (with effect on 1 April 2008), on , by section 280(1) (and see section 280(3) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                  • Section YC 12(1B) heading: inserted (with effect on 1 April 2008), on , by section 280(2) (and see section 280(3) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                  • Section YC 12(1B): inserted (with effect on 1 April 2008), on , by section 280(2) (and see section 280(3) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                  • Section YC 12(4)(b): repealed, on , by section 291(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                  • Section YC 12 list of defined terms FDP account: repealed, on , by section 291(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).