(1) If the person who is treated as having paid income tax requests it in writing, the trustees must provide that person with a statement showing—
(a) the grossed up amount of the discretionary payment,
(b) the sum deducted as mentioned in section 494(1), and
(c) the actual amount of the discretionary payment.
(2) A statement under this section must be in writing.
(3) The duty to comply with a request under this section is enforceable by the person who made it.
(1) Income tax is charged for a tax year if—
(a) in the tax year the trustees of a settlement make payments as a result of which income tax is treated as having been paid under section 494, and
(b) amount A is greater than amount B.
(2) Amount A is the total amount of the income tax treated under section 494 as having been paid.
(3) Amount B is the amount of the trustees' tax pool available for the tax year (see section 497).
(4) The amount of the tax charged under this section is equal to the difference between amounts A and B.
(5) The trustees are liable for the tax.
496A Discretionary payments by trustees: employment income
(1) Section 496B applies if—
(a) in a tax year the trustees of a settlement make a discretionary employment income payment, and
(b) the trustees are UK resident for the tax year.
(2) In this section and section 496B, “discretionary employment income payment” means a payment to a person (“the beneficiary”) that—
(a) is made in the exercise of a discretion (whether exercisable by the trustees or any other person),
(b) is made out of income, and
(c) meets conditions A and B.
(3) Condition A is that what is paid to the beneficiary—
(a) is, only because of the payment, employment income of the beneficiary, but
(b) is not exempt income (as defined in section 8 of ITEPA 2003).
(4) Condition B is that the payment is made at a time when the settlement is an employee benefit settlement.
(5) A settlement is an employee benefit settlement if the trusts on which the settled property is held do not permit the settled property to be applied otherwise than—
(a) for the benefit of persons of one or more relevant classes, or
(b) for the benefit of such persons and for charitable purposes.
(6) “Relevant class” means a class defined by reference to one or more of the following—
(a) employment in a particular trade or profession,
(b) employment by, or holding office with, a body carrying on a trade, profession or undertaking, or
(c) marriage to or civil partnership with, or relationship to, or dependence on, persons of a class mentioned in paragraph (a) or (b).
(7) Where the trusts on which the settled property is held do not permit the settled property to be applied otherwise than as described in subsection (5) during a period (however defined), the settlement is an employee benefit settlement during (and only during) that period.
(1) The trustees of a settlement are entitled (on making a claim in respect of a tax year) to repayment of an amount of income tax equal to the lesser of amount A and amount B.
(2) Amount A is—
TEI×TR
where—
TEI is the total of the amounts that are employment income of beneficiaries of the settlement because of discretionary employment income payments made in the tax year by the trustees, and
TR is the trust rate in force for the tax year.
(3) Amount B is the amount of the trustees’ tax pool available for the tax year (see section 497) reduced (but not so that is goes below nil) by the total amount of income tax (if any) treated under section 494 as having been paid as a result of payments made by the trustees in the tax year.
(4) A claim under this section may not be made before the end of the tax year to which it relates.
(1) Take the following steps to calculate the amount of the trustees' tax pool available for a tax year (“the current tax year”).
This is subject to subsections (2) and (3).
Step 1
Take the amount of the trustees' tax pool available for the previous tax year and deduct from that amount (but not so that it goes below nil)—
(a) the total amount of income tax treated under section 494 as having been paid as a result of payments made by the trustees in the previous tax year, and
(b) the amount to which the trustees are entitled under section 496B in respect of the previous tax year.
Step 2
Add together all amounts of income tax for which the trustees are liable for the current tax year and which are of a type set out in section 498.
Step 3
Add the sum calculated at Step 2 to the amount resulting from Step 1.
(2) If the trustees were non-UK resident for the previous tax year, references in subsection (1) to the previous tax year are to be read as references to the last tax year prior to the current tax year for which the trustees were UK resident.
(3) If—
(a) the current tax year is the tax year during which the settlement is established, or
(b) the trustees have been UK resident for no tax year prior to the current tax year,
ignore Steps 1 and 3 and, accordingly, the trustees' tax pool available for the current tax year is the sum calculated at Step 2.
498 Types of income tax for the purposes of section 497
(1) The types of amount referred to at Step 2 in section 497 are as follows.
Type 1
The amount of any tax on income (other than income of a kind mentioned below in relation to Type ... 3A) charged at the dividend trust rate or at the trust rate.
...
...
Type 3A
The amount of tax at the nominal rate on any amount in respect of which—
(a) the trustees are liable to income tax under section 467 of ITTOIA 2005 (gains from contracts for life insurance etc),
(b) the trustees are liable to income tax at the trust rate by virtue of section 482 above, and
(c) tax at the basic rate is treated as having been paid by virtue of section 530 of ITTOIA 2005 (life insurance).
...
Type 5
The amount of tax on any income determined in accordance with section 26 of FA 2005 (special tax treatment for trusts for the benefit of vulnerable persons).
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2A) In relation to Type 3A, the reference to the nominal rate is a reference to a rate equal to the difference between the trust rate and the basic rate .
(3) In relation to Types 1 to 4, references to income do not include income the tax on which is reduced in accordance with section 26 of FA 2005.
(1) This Chapter applies if—
(a) in a tax year (“the current tax year”) income arises to the trustees of a settlement, and
(b) before being distributed, some or all of that income is income of another person (“the beneficiary”).
(2) It contains provision about how the beneficiary's income mentioned in subsection (1)(b) (“the beneficiary's income”) can be reduced for income tax purposes by reference to expenses of the trustees.
500 Restrictions on use of trustees' expenses to reduce the beneficiary's income
(1) Expenses of the trustees can be used to reduce the beneficiary's income for income tax purposes only so far as—
(a) the expenses are incurred by the trustees in the current tax year or in an earlier tax year, and
(b) as a result of the expenses being chargeable to income as mentioned in subsection (2) or (3), the beneficiary's entitlement to the beneficiary's income is reduced by reference to the expenses.
(2) Expenses are chargeable to income for the purposes of subsection (1)(b) if they are chargeable to income by the trustees under a term of the settlement (subject to any overriding law which prevents the expenses from being so chargeable).
(3) Expenses are also chargeable to income for the purposes of subsection (1)(b) if they—
(a) are not chargeable to income by the trustees under a term of the settlement, but
(b) are chargeable to income by the trustees in accordance with any law (subject to any overriding term of the settlement which prevents the expenses from being so chargeable).
(4) Expenses cannot be used to reduce the beneficiary's income for income tax purposes so far as they are expenses which have fallen, or may fall, to be taken into account for the purpose of calculating the trustees' liability to income tax for any tax year.
(1) This section applies if—
(a) expenses of the trustees are to be used to reduce the beneficiary's income for income tax purposes, and
(b) a proportion of the beneficiary's income is untaxed income (see section 502).
(2) A proportion of those expenses is not to be so used.
(3) That proportion is the same as the proportion of the beneficiary's income which is untaxed income.
(4) In subsection (3) the references to the beneficiary's income and untaxed income do not, in either case, include so much (if any) of that income as is equal to the amount of income tax, or of any foreign tax, for which the trustees are liable on that income.
(5) “Foreign tax” means any tax which—
(a) is of a similar character to income tax, and
(b) is imposed by the laws of a territory outside the United Kingdom.
(1) For the purposes of section 501 the beneficiary's income is untaxed income so far as the beneficiary is not liable to income tax on it wholly or partly because the beneficiary—
(a) has been non-UK resident, or
(b) has been treated as resident in a territory outside the United Kingdom under double taxation arrangements.
(2) If the income tax charged on the beneficiary for the beneficiary's income is limited under Chapter 1 of Part 14 (limits on liability to income tax of non-UK residents), the untaxed income includes so much of the beneficiary's income which is disregarded income (within the meaning of that Chapter) except so far as the disregarded income is within subsection (3).
(3) The disregarded income is within this subsection so far as—
(a) sums representing income tax have been deducted from the income, or
(b) sums representing income tax have been treated as deducted from or paid in respect of the income, ...
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) This section applies if the beneficiary's income is to be reduced for income tax purposes by expenses of the trustees.
(2) The beneficiary's income is to be reduced in the following order—
first, reduce dividend income within subsection (3) (if any),
second, reduce dividend income not within that subsection (if any),
third, reduce savings income (if any), ...
fourth, reduce property income (if any), and
fifth, reduce other income (if any).
(3) Income is within this subsection so far as it is—
(a) chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc from UK resident companies),
(b) chargeable under Chapter 5 of that Part (stock dividends from UK resident companies), or
(c) chargeable under Chapter 6 of that Part (release of loan to participator in close company).
(4) If the trustees are liable for income tax charged on a component of the beneficiary's income at a particular rate, then any reduction of that component is to be made in accordance with the steps set out in subsection (5).
(5) Here are the steps.
Step 1
Deduct from the component the amount of income tax charged on it at the particular rate for which the trustees are liable.
Step 2
Take the result from Step 1 and reduce it (but not below nil) by the amount of the trustees' expenses so far as they have not already been used to reduce other components of the beneficiary's income.
Step 3
Take the result from Step 2 and gross it up by reference to the particular rate.
The result is the reduced amount of the component of the beneficiary's income.
(1) This Chapter makes provision about income arising from heritage maintenance property comprised in a heritage maintenance settlement.
(2) In this Chapter—
“heritage body” means a body or charity of a kind mentioned in paragraph 3(1)(a)(ii) of Schedule 4 to IHTA 1984 (maintenance funds for historic buildings etc),
“heritage direction” means a direction under paragraph 1 of that Schedule,
“heritage maintenance property” means any property in respect of which a heritage direction has effect,
“heritage maintenance settlement” means a settlement which comprises heritage maintenance property, and
“property maintenance purpose” means any of the purposes mentioned in paragraph 3(1)(a)(i) of that Schedule.
(3) If a settlement comprises both heritage maintenance property and other property, the heritage maintenance property and the other property are treated as comprised in separate settlements for the purposes of Chapters 2 to 8 of this Part and the following provisions—
(a) sections 64 to 66 and sections 75 to 79 (trade loss relief against general income),
(b) sections 83 to 88 (carry-forward trade loss relief), and
(c) Chapter 5 of Part 5 of ITTOIA 2005.
(1) The trustees of a heritage maintenance settlement may elect for this section to have effect for a tax year.
(2) If an election under subsection (1) has effect for a tax year, the rules in subsections (3) and (4) apply.
(3) Income arising in the year from the heritage maintenance property comprised in the settlement, which would otherwise be treated as income of the settlor under Chapter 5 of Part 5 of ITTOIA 2005, is not to be so treated.
(4) Any sum applied out of the heritage maintenance property in the year for a property maintenance purpose, which would otherwise be treated for income tax purposes as the income of a person—
(a) because of the person's interest in (or occupation of) the property in respect of which the sum is applied, or
(b) under section 633 of ITTOIA 2005 (capital sums paid to settlor by trustees of settlement),
is not to be so treated.
(5) An election under subsection (1) must be made on or before the first anniversary of the normal self-assessment filing date for the tax year to which it relates.
(1) If a change of circumstances arises during a tax year—
(a) the part of the year before the change and the part of the year after the change are to be treated as separate tax years for the purposes of section 508, this section and section 510, and
(b) separate elections under section 508(1) may be made for each part.
(2) A change of circumstances arises if conditions A and B are met.
(3) Condition A is that for any part of the tax year—
(a) a heritage direction has effect, and
(b) income arising from the heritage maintenance property comprised in the settlement is treated as income of the settlor under Chapter 5 of Part 5 of ITTOIA 2005.
(4) Condition B is that for the remaining part of the year one or both of the following paragraphs applies—
(a) no heritage direction has effect, and
(b) no income arising from property comprised in the settlement is treated as income of the settlor under Chapter 5 of Part 5 of ITTOIA 2005.
510 Sums applied for property maintenance purposes
(1) This section applies if—
(a) income arises from the heritage maintenance property comprised in a heritage maintenance settlement in a tax year in respect of which no election is made under section 508,
(b) the income is treated under Chapter 5 of Part 5 of ITTOIA 2005 as income of the settlor, and
(c) a sum in excess of the income is applied for a property maintenance purpose in the year.
(2) Any such sum which is so applied in that year, which would otherwise be treated for income tax purposes as the income of a person—
(a) because of the person's interest in (or occupation of) the property in respect of which the sum is applied, or
(b) under section 633 of ITTOIA 2005 (capital sums paid to settlor by trustees of settlement),
is not to be so treated.
511 Prevention of double taxation: reimbursement of settlor
(1) This section applies to income arising from heritage maintenance property if—
(a) the income is treated under Chapter 5 of Part 5 of ITTOIA 2005 as income of the settlor,
(b) the income is applied in reimbursing the settlor for expenditure incurred by the settlor for a property maintenance purpose, and
(c) the expenditure is deductible in calculating the profits of—
(i) a trade, or
(ii) a UK property business,
carried on by the settlor.
(2) Any such income—
(a) is not to be brought into account as a receipt in calculating the profits of that trade or business, and
(b) is not to be treated as income of the settlor otherwise than under Chapter 5 of Part 5 of ITTOIA 2005.
(1) Income tax is charged in respect of a heritage maintenance settlement on any of the occasions described in cases A to D, subject to sections 516 and 517.
(2) Case A is where any of the property comprised in the settlement (whether capital or income) is applied otherwise than—
(a) for a property maintenance purpose, or
(b) as respects income not so applied and not accumulated, for the benefit of a heritage body.
(3) Case B is where any of that property, on ceasing to be comprised in the settlement, devolves otherwise than on a heritage body.
(4) Case C is where the heritage direction ceases to have effect in respect of the settlement.
(5) Case D is where any of the property comprised in the settlement, on ceasing at any time to be comprised in the settlement—
(a) devolves on a heritage body, and
(b) at or before that time an interest under the settlement is or has been acquired for a consideration in money or money's worth by that or another such body.
(6) For the purposes of subsection (5)(b) any acquisition from another such body is to be ignored.
(1) Tax is charged under section 512 on the whole of the income—
(a) which has arisen in the relevant period from the property comprised in the settlement, and
(b) which has not been applied (whether or not it has been first accumulated) for a property maintenance purpose or for the benefit of a heritage body.
(2) In this section “relevant period” means—
(a) if tax has become chargeable under section 512 in respect of the settlement on a previous occasion, the period since the last occasion, and
(b) in any other case, the period since the settlement took effect.
(3) Tax charged under section 512 is in addition to any tax otherwise chargeable.
(4) All the provisions of the Income Tax Acts relating to assessments and to the collection and recovery of income tax (so far as applicable) are to apply to that charge.
Tax is charged under section 512 at the rate found by—
(a) taking the additional rate for the tax year during which the charge arises, and
(b) reducing it by the trust rate for that year.
(1) This section applies if the whole of the property comprised in a settlement becomes comprised in another settlement because of a tax-free transfer.
(2) The occasion of charge under section 512, which would otherwise occur at the time of transfer, occurs when tax first becomes chargeable under that section in respect of any settlement comprising the transferred property (“the chargeable settlement”).
(3) For the purposes of section 513(1) as it applies to the chargeable settlement, the relevant period is adjusted so that it begins—
(a) on the occasion when tax last became chargeable under section 512 in respect of any previous settlement from which the property was transferred, or
(b) if there has been no such occasion, when such previous settlement (or the first of them) took effect.
(4) In this section “tax-free transfer” means a transfer of property from one settlement into another in either of the following cases—
(a) where paragraph 9(1) of Schedule 4 to IHTA 1984 provides (or, but for paragraph 9(4) of that Schedule, would provide) an exception from charge in respect of the property, or
(b) where, both immediately before and immediately after the transfer, the property is heritage maintenance property.
517 Exemption for income treated as income of settlor
(1) Tax is not chargeable under section 512 in respect of income which is treated under section 624 or 629 of ITTOIA 2005 as income of the settlor.
(2) If such income arises in a tax year, any sums applied in the year—
(a) for a property maintenance purpose, or
(b) for the benefit of a heritage body,
are to be treated as paid first out of that income and, so far as there is any excess, out of income that does not fall within subsection (1).
This Part contains provision about the income tax treatment of certain profits and gains realised from disposals concerned with land in the United Kingdom.
(1) Section 517C(1) applies (subject to subsection (3) of that section) if—
(a) a person within subsection (2)(a), (b) or (c) realises a profit or gain from a disposal of any land in the United Kingdom, and
(b) any of conditions A to D is met in relation to the land.
(2) The persons referred to in subsection (1) are—
(a) the person acquiring, holding or developing the land,
(b) a person who is associated with the person in paragraph (a) at a relevant time, and
(c) a person who is a party to, or concerned in, an arrangement within subsection (3).
(3) An arrangement is within this subsection if—
(a) it is effected with respect to all or part of the land, and
(b) it enables a profit or gain to be realised—
(i) by any indirect method, or
(ii) by any series of transactions.
(4) Condition A is that the main purpose, or one of the main purposes, of acquiring the land was to realise a profit or gain from disposing of the land.
(5) Condition B is that the main purpose, or one of the main purposes, of acquiring any property deriving its value from the land was to realise a profit or gain from disposing of the land.
(6) Condition C is that the land is held as trading stock.
(7) Condition D is that (in a case where the land has been developed) the main purpose, or one of the main purposes, of developing the land was to realise a profit or gain from disposing of the land when developed.
(8) In this section “relevant time” means any time in the period beginning when the activities of the project begin and ending 6 months after the disposal mentioned in subsection (1).
(9) In this section “the project” means all activities carried out for any of the following purposes—
(a) the purposes of dealing in or developing the land, and
(b) any other purposes mentioned in Conditions A to D.
(10) For the purposes of this section a person (“A”) is associated with another person (“B”) if—
(a) A is connected with B by virtue of any of subsections (2) to (4) of section 993 (read in accordance with section 994), or
(b) A is related to B (see section 517U).
517C Disposals of land: profits treated as trading profits
(1) The profit or gain is to be treated for income tax purposes as profits of a trade carried on by the chargeable person.
(2) If the chargeable person is non-UK resident, that trade is the person's trade of dealing in or developing UK land (as defined in section 6B of ITTOIA 2005).
(3) But subsection (1) does not apply to a profit or gain so far as it would (apart from this section) be brought into account as income in calculating profits (of any person)—
(a) for income tax purposes, or
(b) for corporation tax purposes.
(4) The profits are treated as arising in the tax year in which the profit or gain is realised.
(5) This section applies in relation to gains which are capital in nature as it applies in relation to other gains.
517D Disposals of property deriving its value from land in the United Kingdom
(1) Section 517E(1) applies (subject to subsection (3) of that section) if—
(a) a person realises a profit or gain from a disposal of any property which (at the time of the disposal) derives at least 50% of its value from land in the United Kingdom,
(b) the person is a party to, or concerned in, an arrangement concerning some or all of the land mentioned in paragraph (a) (“the project land”), and
(c) the arrangement meets the condition in subsection (2).
(2) The condition is that the main purpose, or one of the main purposes, of the arrangement is to—
(a) deal in or develop the project land, and
(b) realise a profit or gain from a disposal of property deriving the whole or part of its value from that land.
517E Disposals within section 517D: profits treated as trading profits
(1) The relevant amount is to be treated for income tax purposes as profits of a trade carried on by the chargeable person.
(2) If the chargeable person is non-UK resident, that trade is the chargeable person's trade of dealing in or developing UK land.
(3) But subsection (1) does not apply to an amount so far as it would (apart from this section) be brought into account as income in calculating profits (of any person)—
(a) for income tax purposes, or
(b) for corporation tax purposes.
(4) The profits are treated as arising in the tax year in which the profit or gain is realised.
(5) In this section the “relevant amount” means so much (if any) of the profit or gain mentioned in section 517D(1) as is attributable, on a just and reasonable apportionment, to the relevant UK assets.
(6) In this section “the relevant UK assets” means any land in the United Kingdom from which the property mentioned in section 517D(1) derives any of its value (at the time of the disposal mentioned in that subsection).
(7) This section applies in relation to gains which are capital in nature as it applies in relation to other gains.
(1) Sections 517B to 517E have effect as if they included provision about losses corresponding to the provision they make about profits and gains.
(2) Accordingly, in the following sections of this Part references to a “profit or gain” include a loss.
(1) For the purposes of sections 517C and 517E the general rule is that the “chargeable person” is the person (“P”) that realises the profit or gain (as mentioned in section 517B(1) or 517D(1)).
(2) The general rule in subsection (1) is subject to the special rules in subsections (4) to (6).
(3) But those special rules do not apply in relation to a profit or gain to which section 517H(3) (fragmented activities) applies.
(4) If all or any part of the profit or gain accruing to P is derived from value provided directly or indirectly by another person (“B”), B is the “chargeable person”.
(5) Subsection (4) applies whether or not the value is put at the disposal of P.
(6) If all or any part of the profit or gain accruing to P is derived from an opportunity of realising a profit or gain provided directly or indirectly by another person (“D”), D is “the chargeable person” (unless the case falls within subsection (4)).
(7) For the meaning of “another person” see section 517P.
(1) Subsection (3) applies if—
(a) a person (“P”) disposes of any land in the United Kingdom,
(b) any of conditions A to D in section 517B is met in relation to the land, and
(c) a person (“R”) who is associated with P at a relevant time has made a relevant contribution to activities falling within subsection (2).
(2) The following activities fall within this subsection—
(a) the development of the land,
(b) any other activities directed towards realising a profit or gain from the disposal of the land.
(3) For the purposes of this Part, the profit or gain (if any) realised by P from the disposal is to be taken to be what that profit or gain would be if R were not a distinct person from P (and, accordingly, as if everything done by or in relation to R had been done by or in relation to P).
(4) Subsection (5) applies to any amount which is paid (directly or indirectly) by R to P for the purposes of meeting or reimbursing the cost of income tax which P is liable to pay as a result of the application of subsection (3) in relation to R and P.
(5) The amount—
(a) is not to be taken into account in calculating profits or losses of either R or P for the purposes of income tax or corporation tax, and
(b) is not for any purpose of the Corporation Tax Acts to be regarded as a distribution.
(6) In subsection (1) “relevant time” means any time in the period beginning when the activities of the project begin and ending 6 months after the disposal.
(7) For the purposes of this section any contribution made by P to activities falling within subsection (2) is a “relevant contribution” unless the profit made or to be made by P in respect of the contribution is insignificant having regard to the size of the project.
(8) In this section “contribution” means any kind of contribution, including, for example—
(a) the provision of professional or other services, or
(b) a financial contribution (including the assumption of a risk).
(9) For the purposes of this section R is “associated” with P if—
(a) R is connected with P by virtue of any of subsections (2) to (4) of section 993 (read in accordance with section 994), or
(b) R is related to P (see section 517U).
(10) In this section “the project” means all activities carried out for any of the following purposes—
(a) the purposes of dealing in or developing the land, and
(b) any other purposes mentioned in Conditions A to D in section 517B.
For the purposes of this Part, the profit or gain (if any) from a disposal of any property is to be calculated according to the principles applicable for calculating the profits of a trade under Part 2 of ITTOIA 2005, subject to any modifications that may be appropriate (and for this purpose the same rules are to apply in calculating losses from a disposal as apply in calculating profits).
Any apportionment (whether of expenditure, consideration or any other amount) that is required to be made for the purposes of this Part is to be made on a just and reasonable basis.
(1) Subsection (3) applies if an arrangement has been entered into the main purpose or one of the main purposes of which is to enable a person to obtain a relevant tax advantage.
(2) In subsection (1) the reference to obtaining a relevant tax advantage includes obtaining a relevant tax advantage by virtue of any provisions of double taxation arrangements, but only in a case where the relevant tax advantage is contrary to the object and purpose of the provisions of the double taxation arrangements (and subsection (3) has effect accordingly, regardless of anything in section 6(1) of TIOPA 2010).
(3) The tax advantage is to be counteracted by means of adjustments.
(4) For this purpose adjustments may be made (whether by an officer of Revenue and Customs or by the person) by way of an assessment, the modification of an assessment, amendment or disallowance of a claim, or otherwise.
(5) In this section “relevant tax advantage” means an advantage in relation to income tax charged (or which would, if the tax advantage were not obtained, be charged) in respect of amounts treated as profits of a trade by virtue of this Part.
(6) In this section “advantage” includes—
(a) a relief or increased relief from tax,
(b) repayment or increased repayment of tax,
(c) avoidance or reduction of a charge to tax or an assessment to tax,
(d) avoidance of a possible assessment to tax,
(e) deferral of a payment of tax or advancement of a repayment of tax, and
(f) avoidance of an obligation to deduct or account for tax.
517L Gain attributable to period before intention to develop formed
(1) Subsection (2) applies if—
(a) subsection (1) of section 517C applies because Condition D in section 517B is met (land developed with purpose of realising a gain from its disposal when developed), and
(b) part of the profit or gain mentioned in that subsection is fairly attributable to a period before the intention to develop was formed.
(2) Section 517C(1) has effect as if the person mentioned in section 517B(1) had not realised that part of the profit or gain.
(3) Subsection (4) applies if—
(a) section 517E(1) applies, and
(b) part of the profit or gain mentioned in section 517E(5) is fairly attributable to a period before the person mentioned in section 517D(1) was a party to, or concerned in, the arrangement in question.
(4) Section 517E has effect as if the person had not realised that part of the profit or gain.
(5) In applying this section account must be taken of the treatment under Part 2 of ITTOIA 2005 (trading income) of a person who appropriates land as trading stock.
No liability to income tax arises under this Part in respect of a gain accruing to an individual if—
(a) the gain is exempt from capital gains tax as a result of sections 222 to 226 of TCGA 1992 (private residences), or
(b) it would be so exempt but for section 224(3) of that Act (residences acquired partly with a view to making a gain).
(1) This section applies if it is necessary to determine the extent to which the value of any property or right is derived from any other property or right for the purposes of this Part.
(2) Value may be traced through any number of companies, partnerships, trusts and other entities or arrangements.
(3) The property held by a company, partnership or trust must be attributed to the shareholders, partners, beneficiaries or other participants at each stage in whatever way is appropriate in the circumstances.
(4) In this section—
“partnership” includes an entity established under the law of a country or territory outside the United Kingdom of a similar nature to a partnership; and “partners”, in relation to such arrangements, is to be construed accordingly;
“trust” includes arrangements—
which have effect under the law of a country or territory outside the United Kingdom; and
under which persons acting in a fiduciary capacity hold and administer property on behalf of other persons,
and “beneficiaries”, in relation to such arrangements, is to be construed accordingly.