Corporation Tax

Transactions in UK land

Produced by Tolley
  • 22 Dec 2021 16:11

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

  • Transactions in UK land
  • Introduction to the current regime
  • Non-resident companies dealing in or developing UK land
  • Extending the scope of UK corporation tax
  • Definition of ‘dealing in or developing UK land’
  • Meaning of ‘disposal’
  • Arrangements for avoiding tax
  • Anti-forestalling
  • Disposals of UK land on or after 8 March 2017
  • Conditions
  • More...

Transactions in UK land

The rules on taxing the profits of dealing in and developing UK land introduced by FA 2016 are mainly designed to ensure UK non-residents as well as UK residents are within the scope of UK tax on these profits. These rules replace the previous legislation on transactions in land. The rules are widely drafted and catch all persons undertaking transactions in UK land and property, whether resident in the UK or resident outside the UK.

When originally enacted, the rules applied to profits arising from contracts entered into from 5 July 2016. However, the commencement provisions were amended by F(No 2)A 2017, s 39 such that all profits recognised in the accounts on or after 8 March 2017 are taxed, regardless of the date of the contract.

This guidance note firstly discusses the current rules as they apply for corporation tax purposes and, secondly, the previous rules which applied prior to 8 March 2017.

Separate rules apply for income tax which are not discussed further in this guidance note, although the key provisions are similar. For personal tax rules, see the Transactions in UK land ― individuals guidance note.

Given the wide drafting of the current provisions, at first it was not clear how investment activities would be targeted. However, HMRC has provided some guidance on this and has confirmed that it is not the purpose of the rules to alter the treatment of the activity if it is clearly investment. Transactions such as buying or repairing a property

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