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GB 52: Arrangements involving residential land: companies’ shares
or “Rules for companies selling shares when they own residential land”
You could also call this:

“Special rules for trusts that own residential land and make certain changes”

This section applies to trusts that own residential land. If residential land makes up 50% or more of the trust’s assets, and there are changes to the trust deed, decision-makers, or arrangements that aim to avoid the rules about selling residential land within two years, some special rules apply to you.

When these changes happen, it’s treated as if the trustees have sold the residential land. The amount they’re considered to have sold it for is whatever the land was worth at the time of the change.

This rule helps make sure people can’t use trusts to get around the usual rules about selling residential land quickly. If you’re involved with a trust that owns residential land, you need to be careful about making changes that could trigger this rule.

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Next up: GB 53B: Interposed residential property percentage: increases or decreases in value

or “How to calculate property value changes for interposed residential property”
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Part G Avoidance and non-market transactions
Avoidance: specific: Arrangements involving residential land

GB 53Arrangements involving residential land: trusts

  1. This section applies when—

  2. the trustees of a trust own residential land directly or indirectly (trust residential land); and
    1. trust residential land makes up 50% or more, by market value, of the assets of the trust; and
      1. the trust’s trust deed changes, a decision-maker under the trust deed changes, or an arrangement under the trust changes, with a purpose or effect of defeating the intent and application of section CB 6A (Disposal within 2 years: bright-line test for residential land).

        1. The trustees are treated as disposing of the trust residential land affected by a change described in subsection (1)(c) for an amount of consideration equal to the market value of the land at the time of the change.

        Notes
        • Section GB 53: inserted (with effect on 1 October 2015), on , by section 18 of the Taxation (Bright-line Test for Residential Land) Act 2015 (2015 No 111).
        • Section GB 53(1)(c): amended, on , by section 127 of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).