Transactions in land: Clearance applications: Overview
S770 Income Tax Act 2007, S831 Corporation Tax Act 2010
A person who considers that the transactions in land anti-avoidance provisions may be in point in relation to a transaction can apply for a clearance. The application can be made before or after the disposal is made.
The clearance must be made in writing and should include full information and background facts showing how the gain has or will arise. The onus is on the applicant to provide all the information that is material to the decision. Note that a clearance application cannot be made if the land is held as trading stock. For further details, see BIM60400.
Taxpayers should send their clearance applications to:
HM Revenue and Customs
Clearance and Counteraction Team (Anti-Avoidance Group)
PO Box 194
Any clearance applications received in other offices should immediately be passed to the Clearance and Counteraction Team.
HMRC must give the applicant a decision on the transactions in land clearance within 30 days. Therefore, any clearance applications received should be identified as such and sent to the Clearance and Counteraction Team for consideration as soon as possible.
Once HMRC give a clearance, the transactions in land provisions cannot be invoked in respect of that disposal in relation to that taxpayer.
Clearance later found to be void
If, later, it is discovered that the particulars given were incomplete or inaccurate, the clearance is void and can be challenged using the usual mechanisms. The fact that the applicant was not in a position to provide all the material information at the time of the application does not prevent the clearance being void, if further information which would have affected the decision subsequently comes to light.
Transaction may be a trading transaction
It is possible that although a clearance under the transactions in land rules is appropriate, the transaction may be a land trading transaction (see BIM60000 onwards).
In such cases an application for a clearance under the transactions in land rules does not prevent you from taxing the profit from the transaction as trading income where it is appropriate to do so (see BIM60305 regarding the priority of taxing provisions). However, you should not proceed with this course of action until you have consulted with CTISA (Technical).