Income Tax Act 2007 section 517B

Disposals of land in the United Kingdom

Section 517B sets out the circumstances in which profits or gains from disposing of land in the United Kingdom may be treated as trading profits subject to income tax.

• Profits from UK land disposals can be taxed as trading income where the land was acquired, held or developed with profit-making as a main purpose, or where the land is trading stock
• The rules apply not only to the person who acquired, held or developed the land, but also to associates and to anyone involved in arrangements designed to realise a profit from the land
• Four conditions (A to D) cover different scenarios: acquiring land to profit from its sale, acquiring property deriving value from land, holding land as trading stock, and developing land for profit on disposal
• Association between persons is broadly defined and includes connected persons and related parties, and the relevant period runs from the start of project activities until six months after the disposal