Part VII Other property, businesses, investments etc.
Charities and gifts of non-business assets etc.
261ZAF10Gifts of F1direct or indirect interests in UK land to non-residents
1
This section applies where the disposal in relation to which a claim could be made under section 260 is a disposal F12of an asset within section 1A(3)(b) or (c) to a transferee who is not resident in the United Kingdom and, ignoring section 260—
a
a gain would accrue to the transferor on the disposal, and
F9b
on the assumption that the disposal is a direct or indirect disposal of UK land which meets the non-residence condition (whether or not that is the case), that gain would be a relevant gain (see subsections (6) and (7)).
2
Section 260(3) has effect in relation to the disposal as if it read—
3
Where this subsection applies in relation to a disposal, the amount of any chargeable gain which, apart from this section, would accrue to the transferor on the disposal, shall be reduced by an amount equal to the held-over gain on the disposal.
3
Where the disposal is a F5direct or indirect disposal of UK land which meets the non-residence condition—
a
section 260(3), as modified by subsection (2) of this section, and section 260(4) have effect in relation to the disposal as if the references to “chargeable gain” were references to F13“relevant gain”, and
b
section 260(5) has effect in relation to the disposal as if the reference to “the excess referred to in paragraph (b) above” were a reference to F4“the relevant gain which, ignoring this section and section 17(1), would accrue to the transferor on the disposal”.
4
Where a claim for relief is made under section 260 in relation to the disposal mentioned in subsection (1), on a subsequent disposal by the transferee of the whole or part of F7the asset within section 1A(3)(b) or (c) which is the subject of the disposal mentioned in subsection (1), the whole or a corresponding part of the held-over gain (see section 260(4))—
a
is deemed to accrue to the transferee (in addition to any gain or loss that actually accrues on that subsequent disposal), and
5
Where the subsequent disposal mentioned in subsection (4) is a disposal within section 260(2)(a), subsection (7) of that section has effect in relation to the disposal as if—
a
the reference to “the chargeable gain accruing to the transferee on the disposal of the asset” were a reference to the chargeable gain accruing on the disposal as computed apart from subsection (4), and
b
the reference in section 260(7)(b) to “the chargeable gain” were a reference to—
i
ii
the held-over gain deemed to accrue under subsection (4).
F116
For the purposes of this section, a disposal is a “direct or indirect disposal of UK land which meets the non-residence condition” if it is—
a
a disposal on which a gain accrues that falls to be dealt with by section 1A(3) because the asset disposed of is within paragraph (b) or (c) of that subsection, or
b
a disposal on which a gain accrues that falls to be dealt with by section 1A(1) in accordance with section 1G(2) because the asset disposed of is within section 1A(3)(b) or (c).
7
For the purposes of this section, a “relevant gain” means so much of any chargeable gain accruing on a disposal as falls to be dealt with as mentioned in subsection (6)(a) or (b).