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Where Taxpayers and Advisers Meet

ER on land development

Feedback
Posts:351
Joined:Thu Feb 23, 2012 10:26 am
ER on land development

Postby Feedback » Fri Nov 13, 2020 2:33 pm

is Entrepreneurs Relief (pre April 2020) available on the development of commercial land (buy land, develop it by making good access roads and warehouses, sell land) if rental income hasn't been earned from the land (i.e. the land held is not investment land).

I think it is but I can't find the exact provision in law, so any help pointing me in the right direction would be much appreciated.

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: ER on land development

Postby AdamS93 » Fri Nov 13, 2020 4:00 pm

Firstly, have you assessed the 'gain' is subject to CGT or income tax (sounds like the transactions in land rules might bite here meaning any gain will be subject to income tax, not CGT). If income tax than ER/BADR is not on point anyway.

And then to qualify for ER, you have to be disposing of all or part of a business. Selling land with some buildings on doesn't meet that definition.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: ER on land development

Postby bd6759 » Sat Nov 14, 2020 1:56 am

As Adam says, your starting point is s5 ITTOIA 2005. This has all the hallmarks of an activity in the nature of trade.

Feedback
Posts:351
Joined:Thu Feb 23, 2012 10:26 am

Re: ER on land development

Postby Feedback » Tue Nov 17, 2020 10:50 am

so I've had a look at s10 ITTOA and this would appear to cover land....

so if the land has buildings and has received rental income, then CGT rules would apply, but if the land has not received rental income, income tax rules would apply - is that correct?


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