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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Land: capital receipts chargeable to income tax

Certain disposals of land, where the receipt is of a capital nature, nevertheless give rise to either a liability to Income Tax rather than Capital Gains Tax, or partly a liability to Income Tax and partly a liability to Capital Gains Tax. The most important examples are:

  • premiums received for the grant of leases of less than 50 years are partly chargeable to Income Tax as property income, see PIM1200+, and partly to CGT, see CG70820+;
  • certain transactions involving the development of land which are essentially trading transactions but which result in a capital receipt are chargeable to Income Tax by virtue of the anti avoidance provisions in ICTA88/S776, ITA2007/S752-772 and CTA2010/S815-833, see BIM60300 onwards.