Taxation of Chargeable Gains Act 1992

[F1 Exemption for direct or indirect disposals of UK land by persons in which fund invests 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

16 (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) Q is UK property rich by reference (wholly or partly) to particular interests in UK land (“the relevant UK property”), and

(c) a person other than Q makes a disposal at a time when the election has effect.

(2) If—

(a) the disposal is a direct disposal of any of the relevant UK property by a person, and

(b) immediately before the disposal, Q has a 40% investment in the person,

the appropriate proportion of any gain accruing to the person on the disposal is not a chargeable gain.

(3) If the disposal is an indirect disposal of UK land in a case where—

(a) the interests in UK land in question consist of or include any of the relevant UK property, and

(b) immediately before the disposal, Q has a 40% investment in the company in question,

the appropriate proportion of any gain accruing to the person on the disposal is not a chargeable gain.

(4) For the purposes of this paragraph the “appropriate proportion” means the proportion that so much of the consideration for the disposal as forms part (directly or indirectly) of the assets of Q bears to the total consideration for the disposal.

(5) For the purposes of this paragraph a person has a 40% investment in a company if, applying the rule in paragraph 9 (but without regard to paragraph 10) of Schedule 1A as if references to 25% were references to 40%, the person would be regarded as having a 40% investment in the company immediately before the disposal.

(6) In this paragraph—

• “the interests in UK land in question” means the interests in UK land taken into account in determining whether the disposal is an indirect disposal of UK land, and

• “the company in question”, in relation to a disposal of a right or interest in a company by the person, means that company.

(7) If an officer of Revenue and Customs considers that the operation of this paragraph would otherwise result in the total proportion of a gain that is not a chargeable gain exceeding the whole of the gain, the officer may make such adjustments to the appropriate proportion of a gain accruing to any person as the officer considers just and reasonable to prevent that result.]