UK property tax loophole is plugged

A TAX loophole has been closed to stop Jersey developers avoiding or evading tax on profits made from UK property projects.

The loophole, which was known as ‘The Island Handshake’, had been in existence since the 1950s and was used to make Jersey an ‘investment doorway’ for UK property development.

But with effect from last week the UK and Jersey governments agreed to amend the Double Taxation Agreement they signed in 1952 so that the loophole is closed.

The move comes as part of UK Chancellor George Osborne’s drive to ensure UK tax is paid on UK property developments, which was announced during his Budget speech.