What counts as an interest in land under TCGA 1992 Schedule 1B paragraph 4?

An interest in land broadly covers any estate, interest, right or power held in or over land. It also includes the benefit of any obligation, restriction or condition affecting the value of such an estate, interest, right or power. The definition extends to buildings, structures, and land covered by water or beneath the sea.

What interests are excluded from the definition of interest in land for chargeable gains purposes?

Security interests held to secure payment of money or performance of obligations are excluded. Licences to use or occupy land are also excluded. In England, Wales or Northern Ireland, tenancies at will and certain franchise rights such as market, fair or toll rights are not treated as interests in land. The Treasury may exclude further interests by regulation.

Are rentcharges and Scottish feu duties treated as interests in land under paragraph 4?

Yes. Although security-type interests are generally excluded, rentcharges are specifically preserved within the definition. Scottish feu duties and payments mentioned in section 56(1) of the Abolition of Feudal Tenure etc (Scotland) Act 2000 are also not excluded and remain interests in land for chargeable gains purposes.

Is granting an option over land treated as a disposal of an interest in land?

Yes. Under paragraph 4, granting an option that binds a person to dispose of an interest in land is itself treated as a disposal of an interest in land. This ensures options over land fall within the same chargeable gains rules as direct disposals, capturing both freehold sales and binding option agreements.

Taxation of Chargeable Gains Act 1992 Schedule 1B paragraph 4

Interest in land

Schedule 1B paragraph 4 defines what constitutes an "interest in land" for the purposes of chargeable gains, including what is included, what is excluded, and how the term applies to land both within and outside the UK.

An interest in land broadly covers estates, rights, powers over land, and obligations or restrictions affecting the value of such interests.
Certain interests are excluded, such as security interests, licences to occupy, tenancies at will, and rights like market or toll rights (in England, Wales or Northern Ireland).
Rentcharges and certain Scottish payments (feu duties and related payments) are specifically preserved and not excluded from the definition.
Granting an option that binds someone to dispose of an interest in land counts as a disposal of an interest in land, and "land" includes buildings, structures, and land under the sea or covered by water.

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