Transactions in land

By Tolley

The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Transactions in land
  • Introduction
  • Conditions
  • Calculating the taxable amount
  • When does HMRC seek to apply this anti-avoidance?
  • Clearances
  • Interaction with capital gains tax

Note that the new rules on taxing the profits of dealing in and developing UK land, which are mainly designed to ensure UK non-residents are within the scope of UK tax on these profits, repeal the existing rules on transactions in land with effect from 5 July 2016 and replace them with a new transactions in UK land regime. Although when this was announced in Budget 2016 it had been expected to apply to non-resident companies, in fact the rules are widely drafted and will catch all persons within the scope of income tax.

FA 2016, s 78–79, 82 (ITA 2007, ss 517A–517U)

The new rules do not apply if the profits on disposals of land are already subject to UK income tax or corporation tax but, at the time of writing, it is unclear whether HMRC will use these new provisions to reclassify capital disposals of UK land by UK residents as profits from a trade of dealing or developing UK land (as the definition of ‘disposal of link in the UK’ in ITA 2007, s 517B is widely drafted). This concern is potentially reinforced by the need for the specific exemption for disposals of private residences which qualify for principal private residence (PPR) relief (see ITA 2007, s 517M). Detailed guidance from HMRC is awaited.

For more details, see ‘Finance Bill 2016 changes to treatment of offshore developers and dealers in UK land’ by Michael Thomas in Tax Journal, Issue 1319, 10 (29 July 2016) (subscription sensitive).

This guidance note discusses the old rules which applied up to and including 4 July 2016.


This anti-avoidance legislation has been on the statute books since before the introduction of capital gains tax in 1965 and applies to individuals and trusts (via ITA 2007, ss 752–772) and companies (via CTA 2010, ss 815–833 (subscription sensitive)). This guidance note

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