Revenue Note for Guidance
Subject to certain exceptions, gains on disposals of development land are liable to capital gains tax at 40 per cent, where the disposal was made in the period from 3 December 1997 to 30 November 1999. The rate of tax on disposals made on or after 6 December 2012 is 33 per cent.
(3) “development plan” is defined in the Local Government (Planning and Development) Act, 1963 and refers to the plans made by the appropriate planning authority indicating the development objectives for the land concerned.
“planning authority” is defined in section 2(2) of the Local Government (Planning and Development) Act, 1963 and essentially means the appropriate County Council, Corporation or Urban District Council.
“relevant contract” refers to a contract, etc. for the sale of land which is conditional on planning permission for non-residential development being obtained for that land.
“residential development” includes any development which is ancillary to a residential development and which is necessary for the proper planning and development of the area in question. Such ancillary developments would include shops, schools, churches, estate roads, etc.
(1) In general, the rate of capital gains tax applying to the disposal of assets other than development land (and a number of other exceptions, e.g. certain foreign life assurance policies) is 33 per cent (section 28). Notwithstanding this, and subject to the exceptions specified in subsection (2), the rate of tax applying to gains on the disposals of development land (including unquoted shares which derive their value from land) is—
A 20 per cent rate, rather than the 40 per cent rate, applies to the following disposals made before 1 December 1999 —
(2)(b)(i) This provision has been deleted by section 44 of the Finance (No. 2) Act 2008.
In the case of (c) and (d) above there are two exceptions and in such cases the rate is 40 per cent. These exceptions are—
Relevant Date: Finance Act 2021