Taxation of Chargeable Gains Act 1992

[F1 The basic rule U.K.

Textual Amendments

F1 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

3 (1) An asset derives at least 75% of its value from UK land if— U.K.

(a) the asset consists of a right or an interest in a company, and

(b) at the time of the disposal, at least 75% of the total market value of the company's qualifying assets derives (directly or indirectly) from interests in UK land.

(2) Market value may be traced through any number of companies, partnerships, trusts and other entities or arrangements but may not be traced through a normal commercial loan.

(3) It is irrelevant whether the law under which a company, partnership, trust or other entity or an arrangement is established or has effect is—

(a) the law of any part of the United Kingdom, or

(b) the law of any territory outside the United Kingdom.

(4) The assets held by a company, partnership or trust or other entity or arrangement must be attributed to the shareholders, partners, beneficiaries or other participants at each stage in whatever way is appropriate in the circumstances.

(5) For the purposes of this paragraph—

• “normal commercial loan” means a loan which is a normal commercial loan for the purposes of section 158(1)(b) or 159(4)(b) of CTA 2010, and

• “qualifying assets” has the meaning given by paragraph 4.

(6) The provision made by this paragraph is subject to exceptions provided by—

(a) paragraph 5 (interests in UK land used for trading purposes), and

(b) paragraph 6 (certain disposals of rights or interests in connected companies).]