Corporation Tax Act 2009 section 259

Nature of item apportioned on sale of estate or interest in land

Section 259 ensures that when a company sells an estate or interest in land, any apportioned receipt or outgoing retains its original capital or revenue nature for the purposes of the seller's property business.

• When a company sells an estate or interest in land and a receipt or outgoing is apportioned between buyer and seller, the apportioned amount keeps its original character
• The receipt or outgoing must be one that is receivable or payable by the buyer after the apportionment is made
• In calculating the seller's property business profits, the apportioned part is treated as the same nature (capital or revenue) as the original receipt or outgoing
• The apportionment typically takes place at the time of completion of the sale