Some property developers who have previously used offshore structures to avoid a charge to UK tax on profits from 
trading in UK property will now find they come within the scope of UK tax. The legislative changes remove the territorial restriction that existed to ensure non-resident developers pay the same amount of tax as UK developers on the profits from the development of UK property.
The new legislation will subject profits of a trade which consists of dealing in UK land or developing UK land for disposal, carried on by non-resident companies to UK corporation tax. The rules will apply regardless of the residence of the company, where the trade is a carried on or whether there is a UK permanent establishment through which the trade is carried on.
If the non-resident company’s only activity is a UK property trade then the full trading profits of the company will be taxable. If the company carries on more than one trade or the company also deals in non UK land, only that part of the company’s trade that comprises trading in UK land will fall within the new charge.
Our tax team have considerable experience of working with property business owners. If you’d like to read previous blogs on the subject of property and tax take a look here.
