By using this website, you agree to our use of cookies to enhance your experience.
Commercial Trust
Commercial Trust
5194  Profile Views

About Me

I work at Commercial Trust, where I am responsible for the advice and news sections. Find us over at https://www.commercialtrust.co.uk/news/

my expertise in the industry

Four years' financial reporting for a readership of amateur and professional property investors, as well as the creation and maintenance of hundreds of advice and guidance articles for landlords and commercial/bridging finance clients.

Commercial's Recent Activity

Commercial Trust
Looking at the draft legislation, the Law Society's notes and the technical note released by the government back in March about the upcoming changes, it seems that the intention is to remove the tax advantage for offshore developers, who can avoid paying corporation tax on full development profits. The draft legislation achieves this by removing the territorial restriction in current legislation. Companies already pay corporation tax on disposals of UK land, so on the face of it, the draft legislation achieves its aims in respect of companies and corporation tax. The worrying part is sections 77 and 78, which introduce equivalent legislation for income tax, and would seem to treat profits from disposals as trading profits in a broad range of circumstances. It appears that this would, as the LS observes, give rise to an income tax rather than CGT liability in a number of cases. The current framework distinguishes between trading and investment activity, which the proposed legislation blurs by introducing conditions that the "main purpose" or "one of the main purposes" of acquiring or developing land or property was to realise a gain from its disposal. As the LS states, capital growth is an essential consideration for buy-to-let investors, even though they are engaging in "uncontroversial" investment activity. One of the problems that has long plagued the buy-to-let sector is the ability of government bodies to agree on a clear distinction between investment and trading and apply it consistently. Patchwork legislation introduced without proper consultation is not going to help.

From: Commercial Trust 30 August 2016 15:31 PM

MovePal MovePal MovePal