SCHEDULES
F1SCHEDULE 1AAssets deriving 75% of value from UK land etc
PART 2Whether asset derives at least 75% of its value from UK land
Exception in relation to interests in UK land used for trading purposes
5
1
A disposal of a right or interest in a company is not to be regarded as a disposal of an asset deriving at least 75% of its value from UK land if it is reasonable to conclude that, so far as the market value of the company's qualifying assets derives (directly or indirectly) from interests in UK land—
a
all of the interests in UK land are used for trading purposes, or
b
all of the interests in UK land would be used for those purposes if low-value non-trade interests in UK land were left out of account.
2
An interest in UK land is “used for trading purposes” for the purposes of this paragraph if (and only if), at the time of the disposal—
a
it is being used in, or for the purposes of, a qualifying trade, or
b
it has been acquired for use in, or for the purposes of, a qualifying trade.
3
A trade is a “qualifying” trade for the purposes of this paragraph if—
a
it has been carried on by the company, or by a person connected with the company, throughout the period of one year ending with the time of the disposal on a commercial basis with a view to the realisation of profits, and
b
it is reasonable to conclude that the trade will continue to be carried on (for more than an insignificant period of time) on a commercial basis with a view to the realisation of profits.
4
For the purposes of this paragraph, “low-value non-trade interests in UK land” means interests in UK land—
a
which are not used for trading purposes, and
b
the total market value of which is, at the time of the disposal, no more than 10% of the total market value at that time of the interests in UK land that are used for trading purposes.
Sch. 1A inserted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 14