Income Tax Act 2007 section 756

Income treated as arising when gains obtained from some land disposals

Section 756 sets out when a gain from a land disposal is treated as taxable income rather than a capital gain, and the conditions that must be met for this treatment to apply.

• A gain from disposing of land (or an interest in land) can be treated as income if it was obtained through certain arrangements, developments or transactions involving land situated wholly or partly in the United Kingdom.
• All or part of the land must be in the UK for the rules to bite; if the land is entirely outside the UK, these provisions do not apply regardless of where the taxpayer is resident.
• Where the gain is treated as income, it is deemed to arise at the time the gain is actually realised — for example, on completion of the disposal.
• Where land straddles UK and non-UK locations and the person is non-UK resident, only the portion of the gain attributable to the UK land is treated as income; for UK residents, the entire gain may be caught even if part of the land is outside the UK.