Chapter CG71800
| Published date | 12 March 2016 |
| Record Number | CG71800 |
| Court | HM Revenue & Customs |
| Issuer | HM Revenue & Customs |
In general, the basic provisions regarding part-disposals, see CG12730P, apply to part-disposals of land. However, the nature of land and the interests which can be created over land, give rise to particular difficulties. There are special rules to overcome these difficulties and those rules are covered below.
Special part-disposal rules
A part-disposal of land will commonly take one of two forms:
- The disposal of the owner’s entire interest in an identifiable part of his land. A typical example would be the sale by a farmer of one of his fields.
- The granting of an interest, for example a lease, over the whole or part of the owner’s land. The taxation consequences of the granting of a lease over land are dealt with at CG70800C.
This section is concerned with the normal part-disposal rules. See CG71850 for the special part-disposal rules. For small part-disposals, see CG71870.
Compulsory purchase
Special rules apply where the part-disposal takes place as the result of a compulsory purchase order. Those rules are explained at CG72200.
Strict legal position
Where there has been a part-disposal of a large holding of land, it can be difficult to identify ‘the asset’ which has been the subject of the part-disposal. The following paragraphs, set out the strict legal position. However, it is often possible to avoid the need to value the whole of the unsold portion of the holding of land, see CG71850.
Single acquisition of land
A single acquisition of land, with or without buildings, whether by purchase, gift or inheritance, should normally be regarded as the acquisition of a single asset for Capital Gains Tax purposes. This principle will apply even if the land acquired includes distinct elements, for example houses, outbuildings or woodlands.
However, there may be evidence which shows that more than one asset was acquired. Examples of such evidence could include:
- the contract for purchase of the land may show separate prices for particular parts of the land;
- the land may have been bought in lots at auction;
- the rent roll of an estate may show separate tenants paying particular rents for particular properties and the price of each property may be calculated accordingly.
Blocks of properties and flat
Where the land acquired is an estate of small, let properties, for example a row of terraced houses, ‘the asset’ should be regarded as a block of convenient size to hold as an investment. However, if the...
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