Finance Act 2016 introduced the Property Development tax regime which intended to bring into charge, to either income or corporation tax depending on the identity of the chargeable person, all profits from dealing in or developing land in the UK, irrespective of the residence of the person making the disposal.
The legislation applied to all profits realised from disposals of property made or after 5 July 2016, unless the contract for the disposal was entered into prior to 5 July 2016.
Legislation will be introduced to ensure that all profits from dealing in or developing land in the UK will be subject to tax, when it is recognised in the accounts of the entity on or after 8 March 2017, regardless as to whether the contract for the disposal was entered into prior to 5 July 2016.
This will only impact those offshore property developers who entered into disposal contracts prior to 5 July 2016 with, say, phased or long completion dates, in order to fall outside the scope of the Property Development tax. This amendment brings the legislation into line with the intention of ensuring that all property development profit going forward is subject to tax in the UK.