UK property is often held by non-resident persons indirectly, typically through the holding of shares in a company that in turn directly owns the property. For corporate groups this form of ownership of UK property is very common, with property holding companies often established in such circumstances. Prior to 6 April 2019, these types of indirect disposals by non-residents were not commonly within the scope of UK corporation tax.

However, from 6 April 2019, disposals of shares (or similar interests) in ‘property rich’ companies are subject to tax. This applies to disposals of shares in companies with commercial or residential property. The legislation is drafted with reference to a right or interest in companies that are ‘property rich’, but also includes entities deemed to be companies, such as offshore collective investment vehicles (CIVs) that fall within the definition of company for these purposes. It should be noted that certain aspects of the indirect disposal rules apply differently to collective investment schemes. For example, the investor cannot typically benefit from the 25%