UK: Property developer profits taxable in UK under Article 6 of Isle of Man income tax treaty (Upper Tribunal decision)
Tribunal rejected taxpayer’s argument that Article 6 is limited to income from the use of land.
The Upper Tribunal held in Knights Developments Limited v HMRC [2026] UKUT 329 (TCC) that profits realized by an Isle of Man resident property developer from the acquisition, development, and sale of UK land were taxable in the UK under the UK-Isle of Man income tax treaty because those profits were income derived from UK land within the meaning of Article 6.
The Tribunal rejected the taxpayer’s argument that Article 6 is limited to income from the use of land. However, the Tribunal rejected HMRC’s alternative argument that trading income from the disposal of immovable property could fall within Article 13, which the Tribunal found was limited to capital gains.
Read a September 2026 report prepared by the KPMG member firm in the UK