Income Tax (Trading and Other Income) Act 2005 section 156

Purchase or sale of woodlands

Section 156, which deals with the tax treatment of profits from the purchase and sale of woodlands managed on a commercial basis, is disapplied where the original purchase contract predates 1st May 1963.

• Section 156 normally applies where woodlands in the United Kingdom are purchased and later sold, and the occupation has been on a commercial basis with a view to the realisation of profits
• This transitional rule provides that Section 156 does not apply if the purchase contract was entered into before 1st May 1963
• The relevant date is when the contract for purchase was entered into, not the date of completion or transfer of the land
• This preserves the tax treatment that applied to woodland purchases made under the previous legislative regime