The ‘unlisted trading company’ or ‘private equity’ exception was introduced in 2011 to mitigate the effect of the 2009 offshore fund rules changes which caught many private equity investments. Availability of the exception usually turns on satisfying two of the four qualifying conditions, one of which can be difficult to meet in certain circumstances thanks to the operation of the grouping rules borrowed from the substantial shareholdings exemption. Problem areas include making minority investments through multiple holding vehicles and investment structures which include entities which may not have ‘ordinary share capital’.
