An ‘arrangement’ includes any scheme agreement or understanding, and does not need to be legally enforceable (Section 356OP CTA 2010 and Section 517Q ITA 2007).
Any number of transactions can be regarded as a single arrangement if a common purpose can be recognised.
To be in an arrangement it is necessary to be acting together in some way or to have knowledge of the purpose of the arrangement. Where there is a small shareholder who has no or little input into the company which is developing the land, it is unlikely they will be concerned in an arrangement. There is a large spectrum of situations and the specific circumstances will determine whether an individual or company is concerned in an arrangement.
An individual shareholder purchases a small number of shares in one of the UK’s largest house builders. After holding these shares for a period they decide to dispose of the shares. In this instance it is unlikely the individual is concerned in an arrangement. They are unlikely to be acting together with the house builder to deal in or develop UK land.
An individual purchases 60% of the shares in a company which has been set up to purchase and develop a piece of land. The company will not be selling the land but will be sold to the person who wants to acquire the land. The reason for purchasing the shares was to purchase a portion of the land which will be disposed of after it is developed. When the land is developed the individual sells their shares to a third party. In this instance it is likely the individual has been concerned in an arrangement to develop the land.