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Accountants in Bristol for Property Developers
A property developer predominantly acquires land or properties to carry out building work or renovation with a view of selling the developed properties for profit.
The term "property development" covers a wide range of activities, from major building companies to amateur property investors who acquire the occasional "run-down" property to "do up".
It is important to determine which type of property business you are; investor, developer or mixed status. Each as its own set of tax rules.
Property development is treated as "a trade" by HMRC. Therefore, subsequent profits derived from the sale of a property will be subject to Income Tax and National Insurance rates on trading profits up to 62%, rather than Capital Gains tax (as with property investment).
The tax on the profit on a property disposal could be over twice as much for a property developer than a property investor. This makes it extremely important to classify your business correctly and ensure you are following the correct tax rules (as set by HMRC).
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