Profits from trading in and developing UK land (transactions in UK land)

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Profits from trading in and developing UK land (transactions in UK land)
  • Purpose of the rules
  • When do the rules apply?
  • Charge to tax
  • Conditions—disposal for profit or gain
  • Conditions—person
  • Conditions—land (conditions A–D)
  • Non-resident companies and non-resident individuals
  • Enveloping
  • Anti-fragmentation
  • More...

Profits from trading in and developing UK land (transactions in UK land)

At Budget 2016 the government announced rules to tax profits from trading in and developing UK land. The legislation was added to Finance Bill 2016 (FB 2016) in clauses 76–82 and agreed by the Public Bill Committee on 7 July 2016. It applies to disposals of land on and after 5 July 2016. The main rules are found in Part 8ZB of Corporation Tax Act 2010 (CTA 2010) and Part 9A of the Income Tax Act 2007 (ITA 2007). Specific rules that apply to non-residents can also be found in section 5 of Corporation Tax Act 2009 (CTA 2009) and section 6 of Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005).

The rules replace and extend the 'transactions in land' rules in CTA 2010, Pt 18 and ITA 2007, Pt 13, ch 3. For more detail on the old transactions in land rules see Practice Note: Real estate—anti-avoidance: disposals of land and taxing capital gains as income (pre 5 July 2016) [Archived].

The rules are broadly the same for both corporation tax and income tax. This Practice Note refers to the rules generically (although the precise drafting of the corporation tax rules and income tax rules may be slightly different).

Purpose of the rules

The aim of the rules is to ensure that overseas property

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