Taxation of Chargeable Gains Act 1992 section 169K

Disposal associated with relevant material disposal

Section 169K sets out the conditions that must be satisfied for a disposal of a personally owned asset (such as a property let to a business) to qualify as an "associated disposal" alongside a material disposal of business assets, thereby potentially qualifying for Business Asset Disposal Relief (formerly Entrepreneurs' Relief).

• An associated disposal requires one of conditions A1, A1A, A2 or A3 to be met (relating to the type and size of the material disposal), plus all of conditions B, C and D (withdrawal from the business, business use of the asset, and ownership of the asset).
• For partnership disposals, the individual must generally dispose of at least a 5% interest in partnership assets, and for company disposals, at least 5% of ordinary share capital or 5% by value of securities, with no arrangements in place to reacquire an interest.
• The personally owned asset must have been used for the purposes of the business throughout the two years ending with the earlier of the material disposal date or the cessation of the business, and must have been owned by the individual for at least three years ending with the disposal date.
• Anti-avoidance rules deny relief where "partnership purchase arrangements" or "share purchase arrangements" exist that would allow the individual or a connected person to acquire or increase an interest in the business, unless those arrangements were made before both disposals and without regard to either of them.