United KingdomGOV.UK
Protected cell companies face per-cell UK property richness tests
UK property-richness and substantial-indirect-interest tests now apply per cell for protected cell companies; pre-26 November 2025 disposals stay on the per-company test with a targeted anti-avoidance warning.
By Taxxa AI OyPublished 6 October 2026
Non-UK resident persons face UK tax on gains from indirect disposals of UK land where two conditions are metGOV: the interest disposed of derives 75% or more of its gross asset value from UK land (a UK property rich asset)
GOV, and the person has a substantial indirect interest in that land — broadly a 25% or greater investment in the company whose shares are sold
GOV. The rules sit in sections 1A(3)(c) and 2B(4)(b) of the Taxation of Chargeable Gains Act 1992, with Schedule 1A setting out how each test is applied.
HMRC's guidance now adds a dedicated section for protected cell companiesGOV. These are companies with a core and multiple cells, each cell holding legally segregated assets and liabilities, including from the core — so a single legal company can house several ring-fenced pools of assets whose creditors and investors are confined to their own cell. At Autumn Budget 2025 a new paragraph 10A was added to Schedule 1A
GOV: the UK Property Richness and Substantial Indirect Interest tests now operate per cell rather than across the whole company
GOV. A cell whose own assets are 75% or more UK land by gross value counts as UK property rich even if the company taken together would not
GOV, and the investor's stake is measured against that cell.
The per-cell treatment applies to disposals from 26 November 2025GOV. For earlier disposals, made while the test ran per company, the guidance adds a warning: check whether the arrangements fall within the targeted anti-avoidance rule at CG73952 where an intention behind them was to circumvent either or both of the Schedule 1A tests
GOV. In practice that means structures put in place before the cut-off date to dilute UK-land concentration across cells — so that no single company-level test was met — remain exposed if circumvention was an intended outcome.
The change forms part of the wider non-resident capital gains changes announced alongside the Budget, which amend the definition of a property rich entity from 26 November 2025 and take effect from 1 April 2026 for companies and 6 April 2026 for individuals.
Legal basis: sections 1A(3)(c) and 2B(4)(b) and Schedule 1A paragraph 10A of the Taxation of Chargeable Gains Act 1992.
For any disposal of an interest in a protected cell company on or after 26 November 2025, test UK property richness and substantial indirect interest cell by cell — and review pre-cut-off structures against the CG73952 anti-avoidance rule.