Taxation of Chargeable Gains Act 1992 Schedule 11 paragraph 17

Land: allowance for betterment levy

Paragraph 17 provides relief for betterment levy previously paid on land, allowing it to be taken into account as a deductible cost when the land is later disposed of for capital gains tax purposes.

• Where betterment levy has been paid on land (under Case B, C or F) and was not deducted as a trading expense, the person who paid it may claim relief on a subsequent disposal of that land.
• The relief works by treating the excess of the net development value (used to calculate the levy) over the increment in value since acquisition as an allowable cost deductible against the disposal proceeds.
• Where the event that triggered the levy was itself a part disposal of the land (such as the grant of a lease), special rules apply: the part disposal is effectively ignored for cost allocation purposes, and the disposal proceeds are increased by any premium received on that earlier part disposal.
• If betterment levy was charged and paid on more than one occasion in respect of the same land, the relief applies with modifications for the second and subsequent levies, and if only part of the land is disposed of, all amounts are apportioned appropriately.