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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Land: part-disposal as part of a series of transactions


Where land is transferred between connected persons, it is quite common for the transfer to be made by two or more steps. A typical example would be the granting of a lease over the land, followed by the transfer of the freehold reversion. The combined market values of the lease and the freehold reversion are usually less than the market value of the unencumbered freehold.

Provided that certain conditions are satisfied, TCGA92/S19 counters this particular kind of avoidance. If you encounter a transfer of this kind, you should refer to the detailed instructions at CG14650+ to determine whether Section 19 applies.