Land: capital receipts chargeable to income tax or corporation tax
Certain disposals of land, where the receipt is of a capital nature, nevertheless give rise to either a liability to Income Tax or Corporation Tax rather than Capital Gains Tax, or partly a liability to Income Tax or Corporation 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 or Corporation Tax by virtue of the anti avoidance provisions in Sections 6, 6A & 6B ITTOIA 2005 and Sections 5, 5A & 5B CTA 2009, see BIM60510 onwards; these anti avoidance provisions replaced earlier provisions with effect from 16 March 2016 that were provided at Chapter 3 Part 13 ITA 2007 and Part 18 CTA 2010, for disposal prior to 16 March 2016, see BIM60300 onwards.