In a new submission, the CIOT has sought clarification of HMRC’s approach to the ‘just and reasonable’ apportionment between residential property development (RPD) activities and non-RPD activities for the purposes of the computation of adjusted trading profits and losses for residential property developer tax (RPDT).
In particular HMRC is asked to confirm the following:
that the legislation requires a ‘just and reasonable’ rather than ‘the most appropriate’ allocation of revenue and costs; and
that HMRC will accept an apportionment of revenue and costs in a company’s accounts as being just and reasonable.
The CIOT also suggests a number of examples which could be added to the guidance in HMRC’s Residential Property Developer Tax Manual to illustrate HMRC’s approach to methodologies it considers just and reasonable, including the treatment of costs not directly attributable to a specific development.
In a new submission, the CIOT has sought clarification of HMRC’s approach to the ‘just and reasonable’ apportionment between residential property development (RPD) activities and non-RPD activities for the purposes of the computation of adjusted trading profits and losses for residential property developer tax (RPDT).
In particular HMRC is asked to confirm the following:
that the legislation requires a ‘just and reasonable’ rather than ‘the most appropriate’ allocation of revenue and costs; and
that HMRC will accept an apportionment of revenue and costs in a company’s accounts as being just and reasonable.
The CIOT also suggests a number of examples which could be added to the guidance in HMRC’s Residential Property Developer Tax Manual to illustrate HMRC’s approach to methodologies it considers just and reasonable, including the treatment of costs not directly attributable to a specific development.
