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B5.233 Transactions in land provisions

The 'transactions in UK land' rules are designed primarily to ensure offshore property developers are taxed on their UK profits arising from a trade which involves either dealing in or developing UK land¹, but they in fact apply to both resident and non-resident companies and individuals carrying on such a trade either directly or indirectly. Land is defined for these purposes as buildings, structures, any estate, interest or right in or over land and land under the sea or otherwise covered by water².

For HMRC to ensure overseas developers are taxed, such traders must be unable to claim relief under a double tax treaty, so when the legislation was introduced, the UK's treaties with Jersey, Guernsey and the Isle of Man were amended to ensure that the UK had the relevant taxing rights over its own land. The UK's other double tax treaties preserve the UK's taxing rights over land in the UK and were therefore in line with the rules.

The purpose of this legislation is to target arrangements