½Û×ÓÊÓƵ

How are residential property developer profits or losses calculated?

The RPDT legislation provides a specific formula which is used to calculate the residential property developer profits or losses for an accounting period¹. The starting point is the company's adjusted trading profits or losses of the accounting period. Any residential property developer profits or losses generated by joint ventures that are attributable to the company are then added to this amount. Certain losses and reliefs can then be deducted in order to arrive at the final profit (if a positive figure) subject to the RPDT at a rate of 4%, but only to the extent that it exceeds the developer's allowance for the period.

The formula is as follows:

where, for the accounting period in question:

1. Ìý

   (A)ÌýÌýÌýÌý is the residential property developer's adjusted trading profits, or losses if negative²

2. Ìý

   (B)ÌýÌýÌýÌý is profits or losses of joint ventures that are attributable to the residential property developer

3. Ìý

   (C)ÌýÌýÌýÌý is the amount of loss relief available to the residential property developer³