As Residential Property Developer Tax ("RPDT") has now begun, it's worthwhile reminding ourselves of the key points surrounding it.
Announced by the UK government a little over a year ago, in February 2021, RPDT is essentially a tax to be paid by residential property developers, which is intended to repay the government for the costs of remedying dangerous cladding on high-rise buildings. Sadly, it took the Grenfell Tower tragedy in 2017 for the dangers to come to light.
RPDT will apply from 1 April 2022 at a rate of 4% of profits which exceed £25 million per annum and which arise from UK residential property development activities. According to the government, the intention is to raise £2 billion over the next 10 years although no repeal date for the tax has been legislated, so it will be a case of "watch this space".
Tax partner, Elizabeth Small, wrote about RPDT for Taxation magazine in December 2021. Her article, which answers key questions for property developers about the tax, can be found here.
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