Income Tax Act 2007 section 517O

Relevance of transactions, arrangements, etc

Section 517O ensures that when determining whether profits from UK land disposals should be treated as trading profits, HMRC can look through any indirect method used to transfer property or rights, or to change their value.

• When assessing whether UK land disposal profits are taxable as trading income, all methods of transferring property or rights must be considered, no matter how indirect
• Any occasion on which property or rights are transferred, or their value is enhanced, can trigger the trading profits charge
• The provision specifically catches transactions at undervalue or overvalue, transfers via shares, partnership interests or trust interests, and the creation of options, consent requirements or embargoes affecting disposals
• Disposals arising on the winding up, dissolution or termination of a company, partnership or trust are also caught