We help organisations and their owners and directors.The organisations are UK based as well as international groups looking to invest into the UK. What support is there in light of the COVID-19 crisis? Expert technical advice will be essential when structuring your foreign-owned UK property portfolio.Richard is a personal tax expert and is able to advise high net worth individuals on either immediate tax concerns or a long term plan to ensure that their affairs are structured to take advantage of the tax reliefs available. CGT is charged to all foreign owners of UK residential property whether the property is held individually, through a trust or by a close company. Find out what our people think...For overseas owners of UK land and property, the tax rules have become more complicated over recent years – and for the most part, less beneficial.Many of the changes introduced affect not just non-UK residents, but also foreign-domiciled UK residents (known as ‘resident non-doms’, or RNDs).
A slew of measures have all but eliminated the tax benefits of indirect foreign ownership of UK residential property. Disposals of UK property which is used by the UK branch or agency of a foreign company will remain within the charge to corporation tax on capital gains. This compares favourably to today’s situation: overseas companies currently pay basic-rate income tax on proceeds from UK property, at 20%.But inevitably, it’s not all good news. This is now subject to: • the maximum rate of Stamp Duty Land Tax (SDLT) at 15% • a dedicated tax charge, called the Annual Tax on Enveloped Dwellings (ATED) • new rules to bring it more fully into the UK inheritance tax (IHT) net .
Individuals who are resident but not domiciled in the UK can continue to claim the remittance basis with respect to the proceeds of a sale of foreign shares, even where the company is property rich under these rules. Major changes to taxation of residential property held by offshore companies or offshore trusts were announced in the Budget of July 2015. All companies must also provide their beneficial ownership information to their legal representatives during a property or land purchase, as part of the due diligence process. Moreover, says BIS, lawyers handling the transaction may not be stringent enough in their verification – and even where full information is provided, it is not made public.The new regime will force a foreign company planning a UK property investment to submit beneficial ownership information in a form that is easily accessible to law enforcement organisations. Billions of pounds flowing into the UK property market through foreign companies has pumped up house price growth by more than a quarter, according to … Company ownership of foreign property. And it’s vital that your ownership structures take account of the risks, while being as tax efficient as possible. Registered number: 2632423.
'It will build on [the UK's] reputation for corporate transparency as well as helping to create a hostile environment for economic crimes like money laundering...It will also provide the government with greater transparency on overseas companies seeking public contracts. More than 75 per cent of properties currently under investigation use offshore corporate secrecy to hide their ultimate beneficial owners' identities, it says.Currently, when a non-UK company registers its legal ownership of land in England and Wales, the Land Register shows only the name of the company and its territory of incorporation. UK register of foreign property-owning companies to go live in three years The new regime will force a foreign company planning a UK property investment to submit beneficial ownership information in a form that is easily accessible to law enforcement organisations.
All rights reserved. Registered Office: Artillery House (North), 11-19 Artillery Row, London SW1P 1RT, United Kingdom. That could end the eligibility of indirect structures to avoid IHT and SDLT on UK property in certain circumstances.Faced with an increasingly difficult tax landscape, non-resident property developers must consider two crucial questions – neither of which have simple answers:Under current rules, there can be tax advantages to purchasing UK commercial property via an overseas company.But the opposite is the case for residential property, thanks to ATED, the higher SDLT rate, and greater IHT exposure. It is not, of course, known how much UK property has been bought with foreign criminal proceeds, but BIS claims that GBP180 million of UK property was brought under criminal investigation as the suspected proceeds of corruption between 2004 and 2014. Posted; We are often asked about the various options and structures of owning a property abroad through a company. And it’s vital that your ownership structures take account of the risks, while being as tax efficient as possible.A slew of measures have all but eliminated the tax benefits of indirect foreign ownership of UK residential property.• the maximum rate of Stamp Duty Land Tax (SDLT) at 15%In addition, the Finance Act 2019 has widened the scope for foreign indirect ownership of UK land and property to incur capital gains tax (CGT).Meanwhile, a new tax-avoidance rule specifically targets disposals of foreign entities with at least 75% of their value in UK land and property. They apply to residential and commercialproperty; and to direct and indirect ownership (i.e. But the gains will likely be eroded by the commercial risks and higher transaction costs of selling a company.The tax rules affecting these decisions are highly complex; and there will be a combination of commercial and personal priorities to weigh up alongside the tax implications.