What is a property developer?

Richard Turner examines how the Hopscotch case distinguishes between property development and property development trade

The Annual Tax on Enveloped Dwellings is an annual tax payable mainly by companies that own UK residential property valued at more than £500,000. There is an exemption for a property development trade. In the recent case of Hopscotch v HMRC [2019] UKFTT 0288 (TC), concerning a claim for ATED relief, the First-tier Tribunal has ruled that a property development did not amount to a property development trade.

The key message here is that it is not sufficient for a taxpayer to simply be developing a property. They must also be carrying on a property development trade in order to access ATED and other valuable tax reliefs.