Finance (No. 2) Act 2023

3-year development rule U.K.

4 (1) Section 556 (disposal of assets) is amended as follows.

(2) In subsection (3), in paragraph (b)—

(a) omit “fair”, and

(b) omit the words from “(determined” to the end.

(3) After that subsection insert—

“(3ZA) For the purposes of subsection (3)(b) the value of a property is to be treated as its fair value (determined in accordance with international accounting standards) at whichever of the following times that value is the greatest—

(a) on entry;

(b) when the property was acquired;

(c) the beginning of the accounting period in which the development commenced.”

(4) In subsection (3A), in paragraph (b)—

(a) omit “fair”, and

(b) omit the words from “(determined” to the end.

(5) After that subsection insert—

“(3AA) For the purposes of subsection (3A)(b) the value of a property is to be treated as its fair value (determined in accordance with international accounting standards) at whichever of the following times that value is the greatest—

(a) on entry;

(b) when the property was acquired;

(c) the beginning of the accounting period in which the development commenced.”

(6) The amendments made by this paragraph have effect in relation to disposals of assets made on or after 1 April 2023.