F1SCHEDULE 5AAAUK property rich collective investment vehicles etc
PART 4Exemption
Deemed disposals of UK land by companies previously owned by fund
31
(1)
This paragraph applies if—
(a)
an election under paragraph 12 has been made in respect of a qualifying fund or qualifying company (“Q”),
(b)
Q, or a company covered by the election, disposes of all of its rights and interests in another company (“C”) which is UK property rich, and
(c)
C is covered by the election.
(2)
C is deemed for the purposes of this Act—
(a)
to have sold, at the relevant time, the appropriate proportion of every qualifying asset the actual disposal of which by C would be a direct or indirect disposal of UK land, and
(b)
to have reacquired the appropriate proportion of the asset immediately after the relevant time,
at its market value at the relevant time.
(3)
In the case of a disposal, a company is “covered by the election” for the purposes of this paragraph if the disposal is one to which paragraph 16 applies where the election concerned is the one referred to in this paragraph.
(4)
For the purposes of this paragraph “the appropriate proportion” of an asset is equal to whatever would be, for the purposes of paragraph 16, the appropriate portion of any gain if it is assumed—
(a)
that C had sold the asset at the relevant time, and
(b)
that the total consideration for that sale was such that it results in a gain of £100 accruing to C.
(5)
For the purposes of this paragraph, an asset is a “qualifying asset” if, throughout the period of one year ending with the day on which the disposal of the asset is made, the asset has been held by C or any other company covered by the election or by Q.
(6)
In this paragraph “the relevant time” means the time immediately before the disposal of all the rights and interests in C.