Taxation of Chargeable Gains Act 1992 Schedule 1A paragraph 8

Basic rule

Paragraph 8 sets out the basic rule for determining when a person has a substantial indirect interest in UK land through a disposal of a right or interest in a company.

• A person disposing of a right or interest in a company that derives at least 75% of its value from UK land is treated as having a substantial indirect interest in UK land if they held a 25% investment in the company at any point in the two years before the disposal.
• A person is not treated as having a 25% investment during their qualifying ownership period if the times at which they held such an investment were, taken as a whole, an insignificant proportion of that period.
• The qualifying ownership period is the entire time the person held a right or interest in the company, but excluding any time before the start of the two-year look-back period.
• The rule targets disposals by significant investors in land-rich companies, ensuring that gains attributable to UK land are brought within the charge to capital gains tax.