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HMRC internal manual

Business Income Manual

From
HM Revenue & Customs
Updated
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Trade profits: statute - supplementary charging provisions - occupation of land

SS10, 11 Income (Trading and Other Income) Act 2005; SS37, 38 Corporation Tax Act 2009

The occupation of land in the UK for any purpose is treated as the carrying on of a trade or a part of a trade provided that the land is managed on a commercial basis and with a view to the realisation of profits. Profits are therefore chargeable to Income Tax or Corporation Tax as trading income. This rule does not apply to:

  • farming or market gardening;
  • land being prepared for forestry purposes;
  • woodlands (see below); or
  • the occupation by an insurance company of land which is an asset held by the company for the purposes of its long-term business.

Occupation of woodlands

The occupation of woodlands managed on a commercial basis and with a view to the realisation of profits is not treated as the carrying on of a trade or a part of a trade. Profits are therefore not chargeable as trading income. Guidance on this topic is at BIM67701.