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Charge on gains from transactions in land |
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755 | Charge to tax on gains from transactions in land |
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(1) | Income tax is charged on income treated as arising under section 756 (income |
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treated as arising when gains obtained from some land disposals). |
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(2) | For exemptions from the charge, see— |
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section 765 (exemption: gain attributable to period before intention to |
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section 766 (exemption: disposals of shares in companies holding land as |
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section 767 (exemption: private residences). |
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756 | Income treated as arising when gains obtained from some land disposals |
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(1) | This section applies if— |
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(a) | any of the conditions specified in subsection (3) is met as respects land, |
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(b) | a gain of a capital nature is obtained from the disposal of all or part of |
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(c) | all or part of the land is situated in the United Kingdom, and |
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(d) | a person within section 757(1)(a), (b) or (c) obtains the gain. |
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(2) | The gain is treated for income tax purposes as income arising when the gain is |
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(3) | The conditions are that— |
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(a) | the land is acquired with the sole or main object of realising a gain from |
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disposing of all or part of the land, |
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(b) | any property deriving its value from the land is acquired with the sole |
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or main object of realising a gain from disposing of all or part of the |
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(c) | the land is held as trading stock, and |
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(d) | the land is developed with the sole or main object of realising a gain |
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from disposing of all or part of the land when developed. |
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(4) | It does not matter for the purposes of this section whether the person within |
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section 757(1)(a), (b) or (c) obtains the gain for that person or another person. |
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(5) | For the purposes of this section, if, for example by a premature sale, a person |
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(“A”) directly or indirectly transmits the opportunity of realising a gain to |
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another person (“B”), A obtains B’s gain for B. |
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(6) | For the meaning of “another person”, see section 763. |
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757 | Person obtaining gain |
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(1) | The persons referred to in section 756(1)(d) are— |
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(a) | the person acquiring, holding or developing the land, |
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(b) | a person connected with a person within paragraph (a), and |
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(c) | a person who is a party to, or concerned in, an arrangement or scheme |
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(2) | An arrangement or scheme is within this subsection if— |
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(a) | it is effected as respects all or part of the land, and |
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(b) | it enables a gain to be realised— |
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(i) | by any indirect method, or |
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(ii) | by any series of transactions. |
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(3) | For the purposes of this section any number of transactions may be regarded |
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as constituting a single arrangement or scheme if— |
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(a) | a common purpose can be discerned in them, or |
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(b) | there is other sufficient evidence of a common purpose. |
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(1) | Tax is charged under this Chapter on the full amount of income treated as |
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(2) | See section 760 (method of calculating gain) for how to calculate the amount of |
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(1) | The person liable for any tax charged under this Chapter on income is the |
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person whose income it is. |
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(2) | The general rule is that that person is the person who realises the gain. |
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(3) | But that rule is subject to subsections (4) and (6). |
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(4) | If all or any part of the gain accruing to a person (“A”) is derived from value |
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provided directly or indirectly by another person (“B”), the income is B’s. |
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(5) | Subsection (4) applies whether or not the value is put at the disposal of A. |
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(6) | If all or any part of the gain accruing to a person is derived from an opportunity |
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of realising a gain provided directly or indirectly by another person, the |
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income is the other person’s. |
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(7) | For the meaning of “another person”, see section 763. |
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(8) | In applying section 1015 (territorial scope of charges including the charge |
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under this Chapter) for the purposes of this Chapter, an amount treated as |
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arising to a non-UK resident under section 756 is treated as being from a source |
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in the United Kingdom so far (and only so far) as the land to which the disposal |
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relates is in the United Kingdom. |
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760 | Method of calculating gain |
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(1) | Subsections (3) to (5) apply for calculating a gain for the purposes of this |
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(2) | But, except so far as those subsections make provision, such method is to be |
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used for those purposes as is just and reasonable in the circumstances. |
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(a) | take into account the value of what is obtained for disposing of the |
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(b) | allow only such expenses as are attributable to the land disposed of. |
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(4) | If a freehold is acquired and on disposal the reversion is retained, account may |
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be taken of the way in which trading profits are calculated in such a case. |
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(5) | Account may be taken of the adjustments to be made in calculating trading |
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profits under section 158 of ITTOIA 2005 (lease premiums etc: reduction of |
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(6) | In this section “trading profits” means the profits under Part 2 of ITTOIA 2005 |
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(trading profits) of a person dealing in land. |
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(7) | In the application of this section in Scotland— |
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“freehold” means the interest of the owner, and |
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“reversion” means the interest of the landlord in property subject to a |
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(8) | See also section 764 (valuations and apportionments). |
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Further provisions relevant to the charge |
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761 | Transactions, arrangements, sales and realisations relevant for Chapter |
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(1) | For the purposes of this Chapter, account is to be taken of any method, |
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however indirect, by which— |
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(a) | any property or right is transferred or transmitted, or |
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(b) | the value of any property or right is enhanced or diminished. |
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(a) | the occasion of the transfer or transmission of any property or right |
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(b) | the occasion when the value of any property or right is enhanced, |
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| may be an occasion when tax is charged under this Chapter. |
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(3) | Subsections (1) and (2) apply in particular— |
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(a) | to sales, contracts and other transactions made otherwise than for full |
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consideration or for more than full consideration, |
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(b) | to any method by which any property or right, or the control of any |
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property or right, is transferred or transmitted by assigning— |
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(i) | share capital or other rights in a company, |
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(ii) | rights in a partnership, or |
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(iii) | an interest in settled property, |
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(c) | to the creation of an option affecting the disposition of any property or |
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right and the giving of consideration for granting it, |
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(d) | to the creation of a requirement for consent affecting such a disposition |
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and the giving of consideration for granting it, |
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(e) | to the creation of an embargo affecting such a disposition and the |
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giving of consideration for releasing it, and |
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(f) | to the disposal of any property or right on the winding up, dissolution |
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or termination of a company, partnership or trust. |
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(1) | This section applies if it is necessary to determine the extent to which the value |
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of any property or right is derived from any other property or right for the |
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purposes of this Chapter. |
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(2) | Value may be traced through any number of companies, partnerships and |
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(3) | The property held by a company, partnership or trust must be attributed to the |
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shareholders, partners or beneficiaries at each stage in such manner as is |
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appropriate in the circumstances. |
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763 | Meaning of “another person” |
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(1) | For the purposes of this Chapter references to other persons are to be read in |
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accordance with subsections (2) to (4). |
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(2) | A partnership or partners in a partnership may be regarded as a person or |
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persons distinct from the individuals or other persons who are for the time |
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(3) | The trustees of settled property may be regarded as persons distinct from the |
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individuals or other persons who are for the time being the trustees. |
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(4) | Personal representatives may be regarded as persons distinct from the |
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individuals or other persons who are for the time being personal |
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764 | Valuations and apportionments |
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(1) | All such valuations are to be made as are appropriate to give effect to this |
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(2) | For the purposes of this Chapter, any expenditure, receipt, consideration or |
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other amount may be apportioned by such method as is just and reasonable in |
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765 | Exemption: gain attributable to period before intention to develop formed |
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(1) | This section applies if— |
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(a) | income is treated as arising because the condition mentioned in section |
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756(3)(d) is met (land developed with sole or main object of realising a |
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gain from its disposal when developed), and |
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(b) | part of the income is fairly attributable to a period before the intention |
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(2) | No liability to income tax arises under this Chapter in respect of that part of the |
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(3) | In applying this section account must be taken of the treatment under Part 2 of |
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ITTOIA 2005 (trading profits) of a person who appropriates land as trading |
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766 | Exemption: disposals of shares in companies holding land as trading stock |
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(1) | No liability to income tax arises under this Chapter in respect of a gain on |
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property deriving value from land if— |
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(a) | the gain is obtained by the holder of shares, |
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(b) | the gain arises as a result of the holder of shares falling within section |
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757(1)(a) or (b) (persons acquiring, holding or developing land and |
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(c) | the circumstances are such as are mentioned in subsections (2) and (3). |
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(2) | The gain arises on a disposal of shares in— |
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(a) | a company which holds that land as trading stock, or |
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(b) | a company which directly or indirectly owns at least 90% of the |
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ordinary share capital of another company which itself holds that land |
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(3) | All the land so held is disposed of— |
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(a) | in the normal course of its trade by the company which holds it, and |
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(b) | so as to procure that all opportunity of profit in respect of the land |
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(4) | This section does not affect any liability as a result of any person falling within |
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section 757(1)(c) (parties to arrangements and schemes, etc). |
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767 | Exemption: private residences |
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No liability to income tax arises under this Chapter in respect of a gain accruing |
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(a) | the gain is exempt from capital gains tax as a result of sections 222 to |
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226 of TCGA 1992 (private residences), or |
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(b) | it would be so exempt but for section 224(3) of that Act (residences |
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acquired partly with a view to making a gain). |
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768 | Recovery of tax where consideration receivable by person not assessed |
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(1) | This section applies if a person (“A”) is assessed to tax under this Chapter in |
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respect of consideration receivable by another person (“B”). |
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(2) | Consideration is not regarded as having become receivable by B for this |
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purpose until B can effectively enjoy or dispose of it. |
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(3) | A is entitled to recover from B any part of the tax which A has paid. |
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(4) | If any part of the tax remains unpaid at the end of the period of 6 months |
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beginning with the date when it became due and payable, it is recoverable |
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from B as if B were the person assessed. |
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(5) | Subsection (4) does not affect the right to recover the tax from A. |
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(6) | For the purposes of this section, any income which an individual is treated as |
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having as a result of this Chapter (the “land income”) is treated as the highest |
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part of the individual’s total income. |
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(7) | But if in the tax year— |
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(a) | more than one gain is treated as the individual’s land income, or |
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(b) | the individual is also treated as having income as a result of Chapter 4 |
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(sales of occupation income), |
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| only a just and reasonable proportion of each gain treated as land income is to |
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be treated as the highest part of the individual’s total income. |
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(8) | See section 1012 for the relationship between— |
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(a) | the rules in subsections (6) and (7), and |
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(b) | other rules requiring particular income to be treated as the highest part |
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of a person’s total income. |
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769 | Recovery of tax: certificates of tax paid etc |
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(1) | For the purposes of section 768(3), an officer of Revenue and Customs must, if |
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required to do so, produce a certificate specifying— |
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(a) | the amount of income in respect of which tax has been paid, and |
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(b) | the amount of tax paid. |
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(2) | The certificate is conclusive evidence of any facts stated in it. |
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(3) | See also section 944 (under which directions may be given for payments within |
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this Chapter to non-UK residents to be made under deduction of tax). |
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Clearances and power to obtain information |
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(1) | This section applies if a person considers that the condition mentioned in |
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section 756(3)(a), (b) or (d) may be met as respects a gain of a capital nature |
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(a) | has obtained from the disposal of land, or |
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(b) | would obtain from a proposed disposal of land. |
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(2) | The person may provide the Commissioners for Her Majesty’s Revenue and |
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Customs with written particulars showing how the gain has arisen or would |
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(3) | The Commissioners must notify the person whether or not they are satisfied |
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that, in the circumstances described in the particulars, the person will not, or |
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would not, be liable to tax on the gain under this Chapter. |
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(4) | The notification must be given before the end of the period of 30 days |
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beginning with the day after that on which the particulars are received. |
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(5) | A person notified by the Commissioners under this section that they are so |
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satisfied is not liable to income tax on the gain under this Chapter. |
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(6) | A notification under this section about the Commissioners’ decision |
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concerning a gain is void if the particulars given under this section about the |
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gain do not make a full and accurate disclosure of all facts and considerations |
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relating to it which are material to the decision. |
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771 | Power to obtain information |
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(1) | An officer of Revenue and Customs may by notice require any person to |
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provide the officer within such period as the officer may direct with such |
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particulars as the officer may reasonably require for the purposes of this |
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(2) | That period must be at least 30 days. |
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(3) | The particulars which a person must provide under this section, if required to |
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do so by such a notice, include particulars about— |
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(a) | transactions or arrangements with respect to which the person is or was |
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acting on behalf of others, |
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(b) | transactions or arrangements which in the opinion of the officer should |
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properly be investigated for the purposes of this Chapter, although in |
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the person’s opinion no liability to tax arises under this Chapter, and |
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(c) | whether the person has taken or is taking any part and, if so, what part |
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in transactions or arrangements of a description specified in the notice. |
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(4) | Subsection (3) is subject to subsection (5). |
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(5) | In relation to anything done by a solicitor on behalf of a client who does not |
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consent to the provision of information required to be provided by a notice |
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under subsection (1), the solicitor may not be compelled under this section to |
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(a) | state that the solicitor was acting on behalf of a client, and |
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(b) | give the name and address of the client. |
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(6) | A solicitor is not treated as having taken part in a transaction or arrangement |
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for the purposes of subsection (3)(c) merely because of giving professional |
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advice to a client about it. |
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772 | Interpretation of Chapter |
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(1) | In this Chapter “capital”, in relation to a gain, means that the gain does not fall |
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to be included in any calculation of income for income tax purposes apart from |
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(2) | In this Chapter references to property deriving its value from land include— |
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(a) | any shareholding in a company deriving its value directly or indirectly |
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(b) | any partnership interest deriving its value directly or indirectly from |
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(c) | any interest in settled property deriving its value directly or indirectly |
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(d) | any option, consent or embargo affecting the disposition of land. |
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“company” includes any body corporate, and |
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Sales of occupation income |
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(1) | This Chapter imposes a charge to income tax— |
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