Taxation of Chargeable Gains Act 1992

[F1 Deemed disposals of UK land by company or fund ceasing to be qualifying etc U.K.

Textual Amendments

F1 Sch. 5AAA inserted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 21

32 (1) This paragraph applies if— U.K.

(a) an election under paragraph 12 has been made in respect of a qualifying fund or qualifying company (“Q”),

(b) the election has had effect for a continuous period of at least five years, and

(c) either the election ceases to have effect (otherwise than in disqualifying circumstances) or the relevant fund manager starts to take steps with a view to the disposal of all of the assets of the relevant fund so that it can be wound up.

(2) Q is deemed for the purposes of this Act—

(a) to have sold, at the relevant time, every asset the actual disposal of which by Q would be a direct or indirect disposal of UK land, and

(b) to have reacquired the asset immediately after the relevant time,

at its market value at the relevant time.

(3) In the case of any asset covered by the election for 12 months and held by a company at the relevant time, the company is deemed for the purposes of this Act—

(a) to have sold, at the relevant time, the appropriate proportion of the asset, and

(b) to have reacquired the appropriate proportion of the asset immediately after the relevant time,

at its market value at the relevant time.

(4) For the purposes of sub-paragraph (3) an asset held by a company at the relevant time has been “covered by the election for 12 months” if, assuming the asset were disposed of at the relevant time, the disposal would have been one to which paragraph 16 applied by reference to the election.

(5) For the purposes of sub-paragraph (3) “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 the company 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 it.

(6) For the purposes of this paragraph the election ceases to have effect in “disqualifying circumstances” if—

(a) it ceases to have effect as a result of a notice of revocation under paragraph 15(5)(a) in a case where a designated officer of Revenue and Customs is of the opinion that there have been at least three serious breaches of provision made by or under paragraph 15 during the period for which the election has had effect, or

(b) it ceases to have effect as a result of a notice of revocation under paragraph 18(1).

(7) In this paragraph “the relevant time” means the time immediately before—

(a) the election ceases to have effect, or

(b) the relevant fund manager starts to take steps with a view to the disposal of all or the assets of the relevant fund so that it can be wound up.

(8) For the purposes of this paragraph an election made under paragraph 12 in respect of Q is taken to be the same election as one made at a subsequent time in respect of another qualifying fund or qualifying company (“A”) if, at the subsequent time, Q is wholly owned by A.]