F1PART 9ATransactions in UK land
Anti-fragmentation
517HFragmented activities
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.
Pt. 9A inserted (with effect in relation to disposals on or after 5.7.2016) by Finance Act 2016 (c. 24), s. 79(1), 82(1) (with s. 82(2)-(15)); which insertion also has effect so far as it would not otherwise have effect in accordance with Finance (No. 2) Act 2017 (c. 32), s. 39(1)(2)