COM40012 | Case records:New company records:Offshore property developers

Offshore property developers

Before Budget 2016, a non-resident company was chargeable to UK Corporation Tax only where the profits were attributable to a UK Permanent Establishment. Budget 2016 changed the relevant legislation so that non-resident companies are now within the charge to Corporation Tax on the full profit from carrying on a trade of dealing in or developing UK land. This change has effect in relation to disposals of UK land made on or after 5 July 2016.

These companies may not have to register at Companies House (on the ‘main register’), although they may be on the Register of Overseas Entities. Most offshore property developers will be resident for tax in the Channel Islands, or in overseas countries.

You may be approached by a company or its agent where it has or will have profits that are now chargeable to Corporation Tax, asking for a record to be set up so they may submit returns as Offshore Property Developers. It is likely they will state in their letter that they are registering because they are Offshore Property Developers but if they do not you must establish that the company is an offshore property developer, and that it is registering as part of the change of legislation. The Registered Office (RO) address is likely to be overseas, though may be at a UK agent’s address. An Interactive Guidance (IG) form has been developed to allow these companies to provide the information required to have a record set up within COTAX.

On COTAX you should use the company status F.

Do not make the Accounting Periods dormant or exempt. COTAX will issue notices to deliver a return at appropriate intervals

All companies that are to be included as Offshore Property Developers will need to be transferred into MUID 229600

BIM60515 onwards has more information including the contact details.

Companies registering as Offshore Property Developers are not the same as those required to notify that they are within the scope of Diverted Profits Tax (DPT).

Companies must notify HMRC if they are potentially within the scope of DPT. The DPT guidance provides details on when a notification is required at DPT2010. The guidance explains a company must notify where it is potentially within the scope of DPT. Where UK tax is paid on all profits from dealing in or developing UK land it would be unlikely for any of the notification conditions to be met.