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HMRC internal manual

Business Income Manual

Profits from a trade of dealing in or developing UK land: Profit attributable to period before intention to develop formed

It is possible that when land is acquired the intention was not to realise a gain from its disposal, but subsequently this intention changes. The treatment of situations where the intention has not always been to deal in or develop the land is set out in Section 356OL CTA 2010 and Section 517L ITA 2007.

Where condition D applies (because the land has been developed with a purpose of realising a gain and the initial intention was not to realise a gain from its disposal), only the profits relating to the period after the intention to develop should be taxed.

The apportionment between the two periods should be made on a just and reasonable basis. What is just and reasonable will vary depending on the facts of the case.

The requirement to register for UK corporation tax arises at the point that a trading intention is formed.