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The NRCGT rules charging gains on disposals by non-UK residents of direct or indirect interests in UK land are modified in the case of collective investment vehicles (CIVs) and their investors so as to limit the potential for multiple layers of UK taxation and any unintended consequences of the rules for exempt investors in offshore pension funds and similar vehicles. For an overview of the NRCGT rules generally see C2.1139 and for an overview of the CIV rules see C2.1160. Certain offshore CIVs can elect to be exempt from corporation tax on chargeable gains accruing on direct and indirect disposals of UK land; see C2.1165. This article explains what happens where the conditions for an election cease to be met.

Where a qualifying fund or qualifying company (see C2.1165) ceases to meet the conditions required for the exemption election as set out under TCGA 1992, Sch 5AAA, Pt 4, para 12(2), (3), the election ceases to have effect for