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Property development and ER

I have always understood property development not to qualify as a trade for ER, but CG 64060 (para 2) suggests property development is a trade for ER.  Am I reading this correctly, and property development is actually a trade for ER?


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14th May 2012 15:32

That is not how it reads to me. Read it again several time, it differentiates between buting the land to build a factory and ptodue goods and buying the land to achieve a rental income or capital profit. Regards Peter

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14th May 2012 16:09

But it also puts buying land as trading stock in the same category of buying the land to build a factory.

"For instance, a company, or group, may buy some land. If the company, or group, is a property developer and buys the land as trading stock, or a manufacturer and buys it to provide a site for a factory it intends to build to house its manufacturing process, the buying of the land would probably count as a trading activity. However, if a company, or group, buys the land so as to earn future rental income, or for potential capital growth, the buying of the land would not normally be a trading activity. ""

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15th May 2012 10:07

I'd have considered genuine property development

to be a trade for ER purposes, and there's nothing within S.165A TCGA 1992 to say that it isn't.

I'd also agree with your reading of the CG manual paragraph you refer to.

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15th May 2012 10:56

Many thanks for this Steve. 

Many thanks for this Steve.  I did a bit of googling last night and you have confirmed what I found.  It appears that provided it is, as you say, a genuine property development sale, complete with goodwill etc, rather than, say a sale of one property ER is available.

One final question Steve.  You seem to be able to pinpoint capital gains tax manuals.  I am looking for the capital gains tax manual from HMRC on ER and trusts.  How do you go about finding it.  I have tried doing a search on HMRC website for ER and trusts and just got the help sheet.  Any pointers would be appreciated.

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15th May 2012 11:22


There are only a few sections in HMRC's manual on ER for trusts.  If you go to the ER Index page and then do a "find on page" using the word "trustees", rather than "trusts".

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15th May 2012 11:36

thanks again

After I typed that I found it by going on to a page in the manual and going back to main contents.

Many thanks again for your time.

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14th Jun 2012 11:05

Ha, very good allocation dude. I'm simply satisfied through knowing about whatever you shared her about Property development and ER. Thanks mate. :)

Felix Investment

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