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- 1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 of this Convention and situated in the other Contracting State may be taxed in that other State.
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- 2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) may be taxed in that other State.
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- 3. Gains derived by a resident of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.
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- 4. Gains derived by a resident of a Contracting State from the alienation of shares, other than shares which are traded on a recognised stock exchange, or other comparable interests deriving more than 75 per cent of their value directly or indirectly from immovable property situated in the other Contracting State, other than immovable property in which that company or the holders of those interests carry on their business, may be taxed in that other Contracting State. However, such gains shall be taxable only in the first-mentioned State where:
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- (a) the resident owned less than 50 per cent of the shares or other comparable interests prior to the first alienation;
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- (b) the gains are derived in the course of a corporate reorganisation, amalgamation, division or similar transaction; or
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- (c) the resident is a pension scheme, provided that the gains are not derived from the carrying on of a business, directly or indirectly, by that pension scheme.
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- 5. Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4 of this Article, shall be taxable only in the Contracting State of which the alienator is a resident.
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- 6. Notwithstanding the provisions of paragraph 5 of this Article, a Contracting State may, in accordance with its laws, levy tax on gains derived by an individual who is a resident of the other Contracting State from the alienation or deemed alienation of shares or other rights in a company which, under the laws of the first-mentioned Contracting State, is a resident of that State, and from the alienation or deemed alienation of part of the rights attached to the said shares or other rights, if that individual, either alone or with other connected individuals according to the laws of that State, directly or indirectly holds at least 20 per cent of the issued capital of a particular class of shares in that company. This provision shall apply only if the individual who derives the gains has been a resident of the first-mentioned State at any time during the ten year period preceding the year in which the gains are derived and provided that, at the time he became a resident of the other Contracting State, the above-mentioned conditions regarding ownership in the said company were satisfied.
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- In cases where, under the laws of the first-mentioned State, an assessment has been issued to the individual in respect of the above-mentioned alienation deemed to have taken place at the 22 time of his emigration from the first-mentioned State, the provisions of this paragraph shall apply only insofar as part of the assessment is still outstanding.
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- 7. The provisions of paragraph 5 shall not affect the right of a Contracting State to levy according to its law a tax chargeable in respect of gains from the alienation of any property on a person who is, and has been at any time during the previous six fiscal years, a resident of that Contracting State or on a person who is a resident of that Contracting State at any time during the fiscal year in which the property is alienated.