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HMRC internal manual

Capital Gains Manual

Land: legal and beneficial interests in land

When a piece of land is conveyed from one person to another, the names shown on the conveyance will be those of the legal owners before and after the transfer. However, they will not necessarily be the holders of the beneficial interest in the land and it is this interest which is normally relevant for CGT purposes, see CG11730. Establishing the true owner or owners of the beneficial interest in land can be a difficult matter. There is no single factor which determines beneficial ownership. Each case must be considered in the light of its own particular facts, but the following are indicators that a person has beneficial ownership of land:

  • they hold legal title (in the absence of any contrary evidence the legal owner will normally also be the beneficial owner);
  • they occupy the land;
  • they receive any rental income from the land;
  • they provided the funds used to purchase the land;
  • they received the sale proceeds from a disposal of the land.

Further guidance is available in the Trusts, Settlements and Estates Manual at TSEM9900 onwards.