Taxes Consolidation Act 1997 section 644B

Relief from corporation tax in respect of income from dealing in residential development land

Section 644B provided a reduced corporation tax rate of 20 per cent on income from dealing in residential development land, achieved by reducing the standard 25 per cent rate by one-fifth; the relief ceased to apply from 1 January 2009.

• Where a company carried on an excepted trade that included dealing in residential development land, the corporation tax attributable to that activity was reduced by one-fifth, giving an effective rate of 20 per cent instead of 25 per cent.
• A two-step apportionment was required: first, corporation tax charged at 25 per cent was split between excepted trade income and other income taxed at that rate; second, the excepted trade tax was further split between residential development land receipts and other receipts, excluding construction operations from both figures.
• The same one-fifth reduction applied to gains on disposals of residential development land that were taxed as income under Case IV of Schedule D by virtue of section 643, with a similar two-step apportionment to isolate the tax attributable to the residential element.
• The relief applied from 1 December 1999 to 31 December 2008; where an accounting period straddled either the start or end date, it was split into two notional accounting periods at the relevant boundary.