The Co-ownership Contractual Schemes (Tax) Regulations 2025

Non-UK property assets condition

11.—(1) A co-ownership scheme meets the non-UK property assets condition if—

(a) it has no assets which are interests in UK land, and

(b) it has no assets that derive 75% or more of their value from UK land, ignoring an asset falling within paragraph (2).

(2) An asset falls within this paragraph if—

(a) it is held by a scheme which meets the non-UK real estate condition,

(b) it is an interest or right in a collective investment vehicle which—

(i) is a company, or is assumed to be a company under paragraph 4 of Schedule 5AAA to TCGA 1992 for the purposes of that Schedule, and

(ii) is UK property rich, and

(c) the interest or right does not constitute a 10% investment in that vehicle.

(3) A scheme meets the non-UK real estate condition at any time if, by reference to the prospectus for the scheme as it has effect at that time, less than 10% of the expected market value of the scheme’s investments is intended to be derived from investments consisting of rights or interests in companies which are UK property rich.

(4) Part 2 of Schedule 1A to TCGA 1992(1) applies for the purpose of determining whether a co-ownership scheme has an asset that derives 75% or more of its value from UK land for the purposes of paragraph (1)(b), but for those purposes references to the time of the disposal are to be read as if they were references to the time at which the determination is being made.

(5) In determining for the purposes of paragraph (2)(c) whether an interest or right constitutes a 10% investment in a vehicle, the rule in paragraph 9 of Schedule 1A to TCGA 1992 is to be applied, but for this purpose—

(a) paragraph 10 of that Schedule is to be ignored, and

(b) references to 25% are to be taken as references to 10%.

(6) In this regulation—

(a) “collective investment vehicle” has the meaning given by paragraph 1 of Schedule 5AAA to TCGA 1992(2);

(b) “prospectus”, in relation to a scheme, means any document (however described) which is made available to participants or potential participants and which sets out descriptions of the investments to be made, or intended to be made, by the scheme;

(c) “UK property rich” has the meaning given by paragraph 3 of Schedule 5AAA to TCGA 1992(3).

(1)

Schedule 1A was inserted by paragraph 14 of Schedule 1 to the Finance Act 2019.

(2)

Relevant amendments were made by S.I. 2020/315.

(3)

Relevant amendments were made by S.I. 2020/315.