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BERNARD CRITCHLEY TAX MANAGER, ASPEN WAITE
There may be no place like home, but there could be a tax charge.
Although announced in the 2021 Autumn Statement a new tax, Residential Property Development Tax (RPDT), to be applied from 1 April 2022 has slipped through almost unnoticed.
RPDT will be charged on company profits in addition to its Corporation Tax at 4% on residential property development profits that exceed the annual allowance of £25 million.
Its introduction is meant to defray some of the costs of remediating cladding issues that has been or will be borne by the Government. Whilst announced as time limited it is expected to be in place for at least ten years.
Whilst unincorporated businesses and small and medium sized companies may be excluded from the charge, splitting the development through a number of companies in the same group would not have any benefit as the £25 million allowance would be applied to the group as a whole and not each individual company.
