Section FB 4 — Income Tax Act 2007: Land under scheme for major development or division

FB 4 Land under scheme for major development or division When this section applies (1) This section applies for the purposes of section CB 13 (Disposal: amount from major development or division and not already in income) and Part D (Deductions) when land is transferred on a settlement of relationship property. Transfer at market value plus expenditure (2) If the transferor has already begun an undertaking or scheme of the kind referred to in section CB 13 , the transfer is treated as a disposal by them for an amount that equals the sum of— (a) the market value of the land on the date on which they began the undertaking or scheme: (b) the expenditure that they have incurred in carrying on the undertaking or scheme before the date of transfer. Expenditure incurred by transferee (3) For the purposes of subsection (2), the transferee is treated as having incurred expenditure in— (a) acquiring the land of an amount equal to the market value referred to in subsection (2)(a); and (b) carrying on the undertaking or scheme of an amount equal to the expenditure in subsection (2)(b). When scheme not begun at date of transfer (4) If no undertaking or scheme as described in subsection (2) has begun at the date of transfer, the transferee is treated as having acquired the land for an amount that equals the total cost of the land to the transferor at the date of transfer. Further disposal (5) For the tax consequences if the transferee disposes of the land, see section FB 5 . Defined in this Act: amount , date of transfer , dispose , land , market value , settlement of relationship property , tax , Compare: 2004 No 35 s FF 6(1)(b)