HMRC internal manual

Business Income Manual

BIM60515 - Transactions in land: Overview

This guidance covers:

  • Amendments to Section 5 CTA 2009, and the introduction of new Sections 5A and 5B;
  • Amendments to Section 6 ITTOIA 2005, and the introduction of new Sections 6A and 6B;
  • Repeal of Part 18 CTA 2010 and insertion of Part 8ZB CTA 2010: “Transactions in UK land”;
  • Repeal of Chapter 3 Part 13 ITA 2007 and insertion of Part 9A ITA 2007: “Transactions in UK land”;
  • Commencement and transitional provisions (Sections 80 and 81 FA 2016);
  • Notification, assessment and payment.


The amendments to Section 5 CTA 2009 and Section 6 ITTOIA 2005 extend the scope of UK taxation to profits from a trade of dealing in or developing UK land, regardless of the residence of the person making the disposal.

The transactions in land legislation is repealed and replaced by new legislation with additional provisions, including specific rules with regard to fragmentation, enveloping and anti-avoidance.

One aspect of the commencement and transitional provisions is to prevent tax avoidance between Budget Day (16 March 2016), when the changes were announced, and the introduction of the legislation.

The legislation applies from 5 July 2016 and the anti-forestalling rules apply to transactions on or after 16 March 2016.


In the 2016 Budget, the Government announced changes designed to counter the use of offshore structures, in order to disguise what is in essence a trade in land or a trade in developing land, and ensure the taxation of onshore and offshore property developers was put on a level playing field. These rules do not alter the treatment of or recharacterise investment activities, except where they are part of such a wider trading activity. The legislation was introduced in the Finance Act 2016, and applies from 5 July 2016.

Who is affected?

The rules apply to resident and non-resident companies and individuals carrying on a trade of dealing in or developing UK land either directly or indirectly through, for example, holding an interest in a partnership that carries on a trade of dealing in or developing UK land.  Where the income or profits are already fully chargeable to tax as income in the UK there will be no double charge. This means there will be no impact on UK businesses if profits are already fully taxed as income in the UK.

Process and procedure

Profits from disposals are to be treated as trading profits. The profits should be calculated under normal computational rules under Part 3 CTA 2009 or Part 2 ITTOIA 2005. See here.

Both resident and non-resident companies and individuals will need to notify of chargeability and register to pay tax. 

No challenge on the basis of this legislation should be made unless approval has been sought from CTIS.  Where a challenge is being considered, a submission should be made to Paul Boyle.


Diverted Profits Tax notification requirements

Companies must notify HMRC if they are potentially within the scope of DPT. The DPT guidance provides details on when a notification is required at DPT2010.

The guidance explains a company must notify where it is potentially within the scope of DPT.  Where UK tax is paid on all profits from dealing in or developing UK land it would be unlikely for any of the notification conditions to be met.


Introduction to manual: abbreviations used


PE – Permanent Establishment

CTA – Corporation Tax Act

ITA – Income Tax Act

ITTOIA – Income Tax (Trading and Other Income) Act

TIOPA - Taxation (International and Other Provisions) Act


Introduction to manual: contact point


If you have any comments on this guidance, or suggestions for improvement, please send them to:


Paul Boyle (CS&TD Business, Assets & International)