Taxation of Chargeable Gains Act 1992

[F1 PART 2 U.K. Indirect disposals and direct disposals not chargeable before 6 April 2019

Textual Amendments

F1 Sch. 4AA inserted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 17

Introduction U.K.

2 (1) This Part of this Schedule applies to— U.K.

(a) all indirect disposals of UK land,

(b) direct disposals of UK land that were not fully residential before 6 April 2019, and

(c) direct disposals of UK land by persons who were not chargeable before 6 April 2019.

(2) For the purposes of this paragraph a direct disposal of UK land made by a person was “not fully residential before 6 April 2019” if in the period—

(a) beginning with the day on which the person acquired the interest in land being disposed of or, if later, 6 April 2015, and

(b) ending with 5 April 2019,

there was no day on which the land to which the disposal relates consisted of or included a dwelling.

(3) If the disposal is of an interest in land subsisting under a contract for the acquisition of land that, at any time before 6 April 2019, consisted of or included a building to be constructed or adapted for use as a dwelling, the disposal is taken to be fully residential before that date.

(4) For the purposes of this paragraph, a disposal is made by a person who was not chargeable before 6 April 2019 if, immediately before that date, the person was—

(a) a company which was not a closely-held company (see sub-paragraph (5)),

(b) a widely-marketed scheme (see sub-paragraph (6)), or

(c) a company carrying on life assurance business (as defined in section 56 of the Finance Act 2012) where the interest in UK land was, immediately before that date, held for the purpose of providing benefits to policyholders in the course of that business.

(5) The question as to whether a company is “a closely-held company” is determined in accordance with Part 1 of Schedule C1; but if—

(a) the company is a divided company within the meaning of section 14G, and

(b) the company would not otherwise be regarded as a closely-held company,

the company is to be so regarded if the conditions in subsection (3) of that section are met.

(6) A person is a “widely-marketed scheme” if—

(a) the person is a scheme within the meaning of section 14F, and

(b) condition A or B in that section is met,

reading the reference in subsection (8)(a) of that section to the non-resident CGT disposal as a reference to the disposal mentioned in paragraph 1(1).

(7) In determining for the purposes of this paragraph whether or not—

(a) a person is a closely-held company, or

(b) a person is a widely-marketed scheme,

arrangements are to be ignored if the main purpose of, or one of the main purposes of, them is to secure a tax advantage as a result of the person not being a closely-held company or the person being a widely-marketed scheme.

(8) In this paragraph—

(a) “arrangements” and “tax advantage” have the same meaning as in section 16A, and

(b) any reference to section 14F, 14G or Schedule C1 are to those provisions as they had effect on 5 April 2019 (before their repeal by Schedule 1 to the Finance Act 2019).

Re-basing to 5 April 2019 U.K.

3 (1) In calculating the gain or loss accruing on the disposal it is be assumed that the asset was on 5 April 2019 sold by the person, and immediately reacquired by the person, at its market value on that date. U.K.

(2) This paragraph has effect subject to any election made by the person under paragraph 4 (retrospective basis of calculation).

Election for retrospective basis of calculation U.K.

4 (1) The person may make an election under this paragraph for the assumption that the asset is sold and reacquired as mentioned in paragraph 3 not to apply. U.K.

(2) If, in the case of an indirect disposal of UK land—

(a) a person makes an election under this paragraph, and

(b) a loss accrues on the disposal,

the loss is not an allowable loss.

Calculation of residential property gain if election made under paragraph 4 U.K.

5 (1) This paragraph applies if— U.K.

(a) a person makes an election under paragraph 4 in respect of a disposal on which a gain accrues, and

(b) it is necessary to determine, in accordance with Schedule 1B, how much of the gain is a residential property gain.

(2) Paragraph 2 of Schedule 1B has effect as if—

(a) sub-paragraphs (5) and (6) of that paragraph were omitted, and

(b) in that paragraph, “the applicable period” had the definition given by the next sub-paragraph.

(3) “The applicable period” means the period—

(a) beginning with the day on which the person acquired the interest in land being disposed of or, if later, 31 March 1982, and

(b) ending with the day before the day on which the disposal is made.]