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Gains on direct disposals of assets used wholly and exclusively for the purposes of the property rental business (ie the business that is tax-exempt) are not chargeable gains for tax purposes¹. For disposals made on or after 6 April 2019 by UK REITs and companies that are members of UK REIT groups, an appropriate proportion of any gains on rights or interests in companies that derive at least 75% of their value from UK land ('UK property rich companies') are also exempt. This also applies to disposals of rights or interests in an offshore collective investment vehicle (a 'relevant fund') to which TCGA 1992, Sch 5AAA, para 8 applies and where no election under that paragraph has been made², see C2.1164. With effect from 22 February 2024, a reference to the disposal of a right or interest in a company that is UK property rich includes the disposal of a right or interest in a co-ownership authorised contractual scheme that is UK property rich³.

An asset includes part of an