Transactions in UK land ― individuals

Produced by Tolley
  • (Updated for Autumn Budget 2021)

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

  • Transactions in UK land ― individuals
  • Introduction
  • Conditions ― disposal of UK land
  • Conditions A to D
  • Conditions ― assets that derive at least 50% of their value from UK land
  • Does at least 50% of the value of the asset derive from UK land?
  • Tracing
  • Exemptions
  • Gain attributable to the period before intention to develop the land
  • Gain arises on the disposal of a person’s only or main residence
  • More...

Transactions in UK land ― individuals

The transactions in UK land rules are anti-avoidance rules that have been in the statute book in one form or another since before the introduction of capital gains tax in 1965.

Generally, if an individual sells land (which includes buildings and any estate or interest in land or buildings), on first principles it is taxable as either:

  1. trading income (if it is a trade or a venture in the nature of trade), or

  2. a capital gain

For a discussion on when a sale of land or buildings could be considered to be trading income, see the Application of the badges of trade guidance note. Those rules on treating the sale as trading income have priority over the anti-avoidance provision discussed in this guidance note.

What if the transaction is not a trade or venture in the nature of trade, but the property was purchased or developed with the intention of making a profit similar to that of a property dealer? This is where the transactions in UK land anti-avoidance provision bites, so as to treat the gain as income.

This guidance note discusses the transactions in UK land regime as it applies to individuals disposing of UK land on or after 5 July 2016. For information on the previous regime, which applied to transactions taking place up to and including 4 July 2016, see Simon’s Taxes B5.235–B5.246 and BIM60300.

The transactions in UK land rules also apply to companies. See the Transactions in UK land guidance note.



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