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HMRC internal manual

Business Income Manual

Measuring the profits (particular trades): land: trading transactions: timeshare schemes: what is sold?

The asset sold to the purchaser will usually not bet an interest in land, but a contractual right to use land in certain circumstances.

This is because the typical sale agreement creates, in law, a licence rather than a lease. Such a licence will not normally constitute an interest in land. In some circumstances the licence can become considered in law to be a lease.

However, from a practical point of view it is obvious that the seller’s freehold interest in the land will have been considerably encumbered by the creation and sale of these licences.

We therefore consider that the transaction may be viewed as a transaction in land.