SCHEDULES
F1SCHEDULE 1AAssets deriving 75% of value from UK land etc
PART 2Whether asset derives at least 75% of its value from UK land
The basic rule
3
1
An asset derives at least 75% of its value from UK land if—
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).
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