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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My company has sold some land to be paid for over 4 years.does

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My company has sold some land to be paid for over 4 years.does the whole sale price count as income in year 1 or do we pay tax year by year as the income comes in?

Take a look here and, in particular, here, here, and here.

If the sale price is set in stone at the time of the sale, ie it is ascertainable, then the gain will be charged to corporation tax for the year in which the land is sold but you may be able to pay the tax in instalments (see here).

If the sale price is not set in stone and is contingent on future events, ie it is unascertainable, then the gain on each instalment of the sale proceeds will be charged to corporation tax for the accounting period when it is received.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.

Thanks for that.The Company is a land dealing company and therefore pays Corporation Tax on gains.Would the revenue defer the tax over a period?

My understanding of Section 280 TCGA 1992 which covers payment of tax by instalments covers companies as well as individuls because it mentions "person" as opposed to individual. In Schedule 1 F38 Interpretation Act 1978, "person" can mean "a body of persons corporate or unincorporate".

So, based on that and assuming the sale proceeds are known at the time of the sale, your company can apply to pay any corporation tax on the gain by instalments.

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