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HMRC internal manual

COTAX Manual

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 is effective from 5 July 2016.

These companies do not have to incorporate at Companies House. Many will be registered in the Channel Islands, or in overseas countries.

You may be approached (by letter or phone) 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 RO address is likely to be overseas, though may be at a UK agent’s address.

On COTAX you should:

  • use the company status ‘O’ as the company will not have a Company Registration Number
  • use the date on which the company says it came within the charge to Corporation Tax as the date of incorporation
  • Do NOT make the APs 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
  • Any queries should be sent to the Offshore Property Developers task force representative (Sam El-Grew).

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. 

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.