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HMRC internal manual

Business Income Manual

Expansion of scope of Corporation Tax and Income tax: Trade of dealing in or developing UK land

The meaning of trade of dealing in or developing UK land is set out in Section 5B CTA 2009 and Section 6B ITTOIA 2005.

A non-UK resident’s trade of dealing in or developing UK Land consists of:

  • dealing in UK land or developing UK land for the purpose of disposing of it, this includes redeveloping, or


  • any activities which are treated as profits of a trade of dealing in or developing UK land by virtue of Part 8ZB CTA 2010 or Part 9A ITA 2007.


A trade of dealing in land exists where land and/or property is acquired or developed with a view to profit on disposal. This is in contrast to the situation where property is acquired for investment, usually rental income, but over time that property may increase in value and a profit may therefore be realised from its eventual disposal. This increase in value may arise as a result of movement in the property market or from action taken by an owner to enhance the value of the property for investment purposes.

To establish if an individual or company is trading, the facts of each case are key. The list below gives some factors which could have an impact when considering if the business is carrying on a trade or investment in respect of land.  This list is not definitive and each case will depend on its individual facts and circumstances.

  • Length of time the land is owned.
  • Intention at purchase date.
  • Any change of intention.
  • How the acquisition is funded.
  • The usage of the property by the owner.
  • Whether it is developed or improved (rather than repaired) before disposal.
  • Whether there is a connection with an existing trade – for example a builder buying a property to renovate and sell.

The anti-fragmentation rule needs to be taken into account when considering whether a person is trading (BIM60600); slice of the action contracts and similar arrangements (BIM60645) are also to be considered as trading.



Guidance on the meaning of trade is at BIM20000