Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Property Income Manual

Income excluded from UK property business: wayleaves: CT


Electricity & gas wayleave easements

An easement is a right enjoyed by a person over land which they do not own. Landowners may receive payments for easements from electricity and gas concerns, or other similar undertakings, for easements in connection with cables, pylons or similar on or over their land. The types of payment which may be made include:

  • yearly payments for easements,

  • single lump sum payments for grants in perpetuity or for a specified number of years,

  • yearly or lump sum payments for disturbance arising from the erection of pylons, relaying of mains etc.

How they are treated

a) Yearly payments for easements

  • Where a payment can be regarded as a trading receipt it will be assessable as trading income.

  • Where the electricity wayleave payments are received for wires and cables running over or under land which gives rise to property income, the wayleave payments should be treated as a property income receipt.

  • Otherwise the wayleave payments will be assessable under Part 10 CTA09.

b) Single lump sum payments

These are to be regarded as capital receipts and are accordingly not chargeable as trading income, though CGT liability may arise (see CG12955).

c) Payments for disturbance

Payments for disturbance do not fall under (a) above, even if they are payable under away leave agreement. Yearly payments within CTA09/S45 will be subject to CT.

  • If they are paid to a trader (e.g. a farmer) in respect of disturbance to the trade they should be treated as trade receipts.

  • If they are not referable to a trade, they will have arisen out of the recipient’s interest in the land and should be taxed as property receipts.

Lump sum payments for disturbance will normally be of a capital nature (unless the payment is made to fill a hole in profits as opposed to compensate for damage).

Costs of re-instatement of land

Where there is expenditure on repairs of damage to land or buildings etc. covered by the compensation payment, this will be an allowable deduction either for trading or property profits if the compensation is chargeable to CT.

Where a lump sum payment is regarded as capital, any corresponding expenditure should be excluded from the computations of trading or property profits.