Case law has developed over the years to define the parameters of what a business which consists 'wholly or mainly of making or holding investments' is in relation to land.
Property development
A property development business is not excluded from relief. The nature of these businesses can change over time and it is the nature of the business at the time of the transfer is important. A business which started as a housebuilder but which at the time of the transfer had not built any houses recently and was selling off its land-bank would not qualify for relief1.
In the Special Commissioner case of Piercy (executors of) v HMRC2 a property development company which had not been able to sell its stock in trade of completed properties and had let these, receiving significant rental profits from them, was held to be trading. The development of much of the land had been held up by numerous difficulties and meanwhile the land had been let to tenants on a temporary basis. It had not
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Web page updated on 17 Mar 2025 13:37