Taxation of Chargeable Gains Act 1992 section Sch 5AAA paras 6-7

Disposals by non-UK residents

Section Sch 5AAA paragraphs 6 and 7 set out when a disposal of an asset deriving at least 75% of its value from UK land is treated as connected to a collective investment vehicle, and the exemptions that can disapply those rules.

• A non-UK resident who disposes of an asset deriving at least 75% of its value from UK land, where the disposal is connected to a collective investment vehicle, is treated as having a substantial indirect interest in that UK land at the time of disposal.
• A disposal is connected to a collective investment vehicle in four situations: it involves a right or interest in a CIV or a company deriving at least half its value from CIV participation; the CIV is a partnership and the seller is a participant; the CIV is a company making the disposal itself; or a separate company makes the disposal while the CIV and other UK-property-rich CIVs together hold at least 50% of that company.
• The connection to a CIV is disapplied where the CIV meets both the non-UK real estate condition (no more than 40% of its expected investment value derives from UK land or UK-property-rich companies) and either the genuine diversity of ownership condition or, for companies, the non-close condition.
• Further exemptions apply for overseas life insurance companies, offshore CIVs meeting specified conditions, and multi-vehicle arrangements where an investor would reasonably view their investment as being in the overall arrangement rather than any single vehicle.