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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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Transactions in land: Computation

S760, S764 Income Tax Act 2007, S822, 826 Corporation Tax Act 2010

In order to determine the amount charged to Income Tax or Corporation Tax under the transactions in land provisions, the amount of the ‘gain’ must be ascertained.

The gain must be calculated on a ‘just and reasonable’ basis (i.e. all proceeds, expenses and valuations should be apportioned in this way).

This just and reasonable method must:

  • take into account the value of what is obtained for disposing of the land, and
  • allow only such expenses as are properly attributable to the land which is subject to the disposal.

In order to achieve this, trading income principles are applied. Advice on the computational aspects of a case can be sought from CTISA (Technical).

For details of the period in which the income is charged, see BIM60335.