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HMRC internal manual

Business Income Manual

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HM Revenue & Customs
Updated
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Transactions in land: Territorial scope

The table below summarises the territorial scope of the transactions in land rules.

Residence of taxpayer Where land is located Application of the transactions in land provisions
     
United Kingdom Wholly in the United Kingdom The provisions apply (assuming all the other conditions are met).
United Kingdom Wholly outside the United Kingdom The provisions do not apply.
United Kingdom Partly in the United Kingdom, partly outside the United Kingdom The provisions apply to the whole of the gain (assuming all the other conditions are met).
Non-United Kingdom Wholly in the United Kingdom The provisions apply (assuming all the other conditions are met).
Non-United Kingdom Wholly outside the United Kingdom The provisions do not apply.
Non-United Kingdom Partly in the United Kingdom, partly outside the United Kingdom The provisions apply (assuming all the other conditions are met), but only to the gain attributable to the United Kingdom land.

For detail of the conditions which must be met for the transactions in land rules to apply, see BIM60310.

Withholding tax on payments to non-residents

HMRC has the power under S769(3) Income Tax Act 2007 as read with Section 944 to direct that payments made to non-resident individuals, trustees or personal representatives which are likely to fall within the transaction in land rules should be paid under deduction of tax.

This provision changes the contractual relations between the parties. No attempt to invoke the provision in a working case should be made without prior specific reference to CTISA (Technical), who will consider such cases on an individual basis and decide whether a direction should be made.