Section 261ZA: Gifts of direct or indirect interests in UK land to non-residents, Taxation of Chargeable Gains Act 1992

This section applies where the disposal in relation to which a claim could be made under section 260 is a disposal of 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 gain would accrue to the transferor on the disposal, and

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)).

Section 260(3) has effect in relation to the disposal as if it read—

Where the disposal is a direct or indirect disposal of UK land which meets the non-residence condition—

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 "relevant gain", and

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 "the relevant gain which, ignoring this section and section 17(1), would accrue to the transferor on the disposal".

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 the 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))—

is deemed to accrue to the transferee (in addition to any gain or loss that actually accrues on that subsequent disposal), and

(if that would not otherwise be the case) is to be treated as a relevant gain accruing on a direct or indirect disposal of UK land which meets the non-residence condition.

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—

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

the reference in section 260(7)(b) to "the chargeable gain" were a reference to—

the chargeable gain (or, where the disposal is a direct or indirect disposal of UK land which meets the non-residence condition, the relevant gain) accruing on the disposal, and

the held-over gain deemed to accrue under subsection (4).

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 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

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).

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).

Section 261ZA: Gifts of direct or indirect interests in UK land to non-residents

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