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HMRC internal manual

Business Income Manual

Transactions in land: Clearance applications: Form of words to accept or refuse clearance

S770 Income Tax Act 2007 (ITA 2007), S831 Corporation Tax Act 2010 (CTA 2010)

This guidance applies only if you are an officer authorised to deal with clearance applications (see BIM60395).Please use the following form of words, suitably adapted to the particular circumstances, for granting, or refusing, clearances:

‘Thank you for your application under [S770 ITA 2007 / S831 CTA 2010] received on [date].

In that application you supply particulars of a gain of a capital nature that [has arisen/will arise] from [a/an indirect] disposal of land, to which you consider [S765(3)(a),(b) or (d) ITA 2007 / S819(2)(a),(b) or (d) CTA 2010] may apply.

I [am/am not] satisfied that, in the circumstances described in the application, the gain will not be chargeable to tax under those provisions’.

The ITA 2007 references apply for Income Tax purposes and the CTA 2010 references apply for Corporation Tax purposes. You should take every care to refer to the correct provision. If, exceptionally, you issue a clearance which refers to the wrong provision by mistake, this is treated as if it referred to the correct provision (i.e. it does not invalidate the clearance).

Trading transactions

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 please add a paragraph to the letter above stating that the provision of a clearance does not prevent HMRC 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).