Taxes Consolidation Act 1997 section 642

Transfers of interests in land between certain associated persons

Section 642 prevents persons dealing in or developing land from avoiding tax by buying land at an artificially high price, or selling it at an artificially low price, in transactions with connected persons.

• Where a connected person buys land at above market value for use in a land-dealing trade, the buyer is deemed to have acquired it at market value for tax purposes.
• Where a connected person sells land at below market value from a land-dealing trade, the seller is deemed to have disposed of it at market value for tax purposes.
• A gift of land is treated as a disposal at a nominal price, bringing it within the scope of the below-market-value rule.
• Where the disposal takes the form of a lease, "price" includes any fine, premium or similar payment for the grant of the lease.