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HMRC internal manual

Business Income Manual

Disposals of property deriving its value from land

It is possible to realise profits from the disposal of any property that derives its value from land rather than from the land itself.  There are rules in the legislation to ensure the right amount of tax is paid where any property which derives its value from land is disposed of.


*Example *

A new company is setup to acquire land which will be developed.  The intention is to sell the shares in the company when the land is developed rather than the land itself. If all of the conditions are met the rules will apply to tax the profit on disposal of the shares.