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Transfers of interests in land between certain associated persons.
[F(MP)A68 s19]
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642.—(1) Where an interest in land is disposed of by any person (in this subsection referred to as “the disponer”) to a person connected with the disponer (in this subsection referred to as “the transferee”) and—
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(a) the interest is disposed of at a price greater than its market value, and
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(b) the price—
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(i) is not to be taken into account in relation to the disponer 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
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(ii) is to be so taken into account in relation to the transferee,
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the transferee shall for tax purposes be deemed to have acquired the interest at a price equal to the market value of the interest at the time of its acquisition by the transferee.
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(2) (a) Where an interest in land is disposed of by any person (in this subsection referred to as “the disponer”) to a person connected with the disponer (in this subsection referred to as “the transferee”) and—
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(i) the interest is disposed of at a price less than its market value, and
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(ii) the price—
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(I) is not 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
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(II) is to be so taken into account in relation to the disponer,
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the disponer shall for tax purposes be deemed to have disposed of the interest at a price equal to the market value of the interest at the time of the disposal by the disponer.
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(b) A disposal by means of gift shall be regarded for the purposes of this subsection as being a disposal at a nominal price.
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(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.
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