Earlier in the year the Government announced a potential new tax on residential property developers. The aim of the tax is to assist the Treasury with remediation works to unsafe cladding. The consultation concluded on 22 July 2021 and further details will be issued in due course.
To date, we believe the RPDT will apply to companies developing UK residential property. The tax will be calculated as part of a company’s corporation tax return but will be calculated on untaxed profits.
Companies and groups with relevant profits below £25m per annum are currently exempted from RPDT and therefore the tax is expected only to apply to the largest residential property developers.
Although the rate has not yet been set, it will apply from April 2022 and will be in place until a target of £2bn is raised.