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HMRC internal manual

Business Income Manual

Profits from a trade of dealing in or developing UK land: Transactions in UK land: Amounts treated as trading profits

The transactions in UK land provisions only apply when certain gateway conditions are satisfied.


Section 356OB CTA 2010 sets out the conditions for corporation tax, and Section 517B ITA 2007 sets out the conditions for income tax.


The conditions which must be met are:


  • A person realises a profit or gain from the disposal of all or part of any UK land




  • Any one of conditions A to D apply.


Where the conditions are met the profit or gain is to be treated as a profit of a trade of dealing in or developing UK land, and arising to the chargeable company or person.

The profit or gain will only be chargeable/ allowable if it would not already have been brought into account as income in calculating profits in another section of legislation. See: Profit already brought into account

The profits should be treated as arising in the period in which the profit or gain from the disposal are realised.  Where there is a deemed disposal (for example, an appropriation from trading stock to investment) or write up which would be taxed under Part 3 CTA 2009 if the company was UK Resident, it will be taxed under the transactions in UK land rules. 

If property is appropriated into trading stock, account must be taken of Chapter 10 of Part 3 CTA 2009 for corporation tax and Chapter 11A of Part 2 ITTOIA 2005 for income tax. Profits are calculated based on the amount which the stock would have realised if sold in the open market at the time of the appropriation.

Where a valid election is made under S.161 (3) TGCA 1992 normal rules will apply to adjust the open market value of the property in the computation of trading profits or losses. See CG69200.

Where any gain, or part of a gain is exempt from capital gains tax by virtue of private residence relief no liability to income tax will arise on that exempt amount.  

All references to profits or gains also apply in situations where there is a loss.

For the meaning of ‘realising a gain’ see BIM60830.