Finance (Miscellaneous Provisions) Act, 1968

Transfers of interests in land between certain associated persons.

19.—(1) Where an interest in land is disposed of by any person to a person connected with him (hereafter referred to as the transferee) and—

(a) the interest is disposed of at a price greater than its market value, and

(b) the price—

(i) does not fall to be taken into account, in relation to the disponor, in computing for tax purposes the profits or gains of a trade which is, or includes, a business of dealing in or developing land, but

(ii) does fall to be so taken into account in relation to the transferee,

the transferee shall for tax purposes be deemed to have acquired the interest at a price equal to the market value thereof at the time of its acquisition by him.

(2) Where an interest in land is disposed of by any person to a person connected with him (hereafter referred to as the transferee) and—

(a) the interest is disposed of at a price less than its market value, and

(b) the price—

(i) does not fall to be taken into account, in relation to the transferee, in computing for tax purposes the profits or gains of a trade which is, or includes, a business of dealing in or developing land, but

(ii) does fall to be so taken into account in relation to the disponor,

the disponor shall for tax purposes be deemed to have disposed of the interest at a price equal to the market value thereof at the time of the disposal by him.

A disposal by way of gift shall be regarded for the purposes of this subsection as being a disposal at a nominal price.

(3) In the application of this section to a case in which a lease is granted, any reference to price shall be construed as a reference to the fine, premium or like sum payable for the grant of the lease.