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propertylawyer, Solicitor
Category: Law
Satisfied Customers: 280
Experience:  Property Solicitor with expertise in commercial and residential property transactions.
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I am planning to buy an investment property (to let) in the

Customer Question

Good Day. I am planning to buy an investment property (to let) in the UK. I am not a citizen and rarely visit. What is my best structure for this. Use an off shore company? What does this save me? What type of property is best to invest in from a Tax perspective.
Submitted: 9 months ago.
Category: Law
Customer: replied 9 months ago.
Your suggestions on structures that minimize my tax liabilities over the course of the investment and beyond will be welcome. The investment is a long term one to save my retirement earnings, generate annuity income monthly and the property will be passed on to my children (I have three that are US citizens but I am not a US citizen).
Thank You
Expert:  propertylawyer replied 9 months ago.

How much is the property worth which you are proposing to purchase?

Customer: replied 9 months ago.
I am planning to invest about 750,000 pounds. I have not got a property yet as I need to research on the right structure.
Expert:  propertylawyer replied 9 months ago.

With the recent changes to stamp duty land tax in the UK you will have to pay an additional 3% surcharge if you own another property anywhere in the world. The loophole of off shore companies has been closed off. Any company, including off shore ones will also be subject to the additional 3 % surcharge. as a result Sdlt is £50k.

Sdlt rates were lowered slightly earlier in the year and it may represent better value, tax wise, to acquire a commercial property.

It would not be possible within the scope if this service to advise on tax structures. You would need to retain a cross border tax advisor to consider your personal circumstances in light of any proposed investment.

I hope this helps. Any further questions or queries?

Customer: replied 9 months ago.
Thanks. Kindly provide the following:
1. The applicable taxes and stamp duties if I use an off shore company to acquire a residential property and let it.
2. The applicable taxes and stamp duties if I use an off shore company to acquire a commercial property and let it.
3. The applicable inheritance tax if I use an offshore company for the property acquisition.
4. In setting up the offshore company, If I make my 3 shareholders and directors, will this address the issue of title transfer upon my demise and therefore IHT?
5. Please ignore my home base tax status. I pay my tax fully as an Employee and other taxes from offshore assets are not applicable due to the loose tax oversight structures.Thank You
Expert:  propertylawyer replied 9 months ago.

Apologies. I was looking into off shore structures etc. Thus is however better dealt with by an accountant, accountants specialise in tax advice, solicitors are not authorised to give tax advice. I can respond in general terms:

1. Stamp duty land tax on acquisition and potentially capital gains tax on disposal. Any cgt will depend on your accountant 's advice and what reliefs may be available. As to tax on income, you will need to liaise with an accountant.

2. As above.

3. Here it is the value of your shareholding in the company. The assets held by the company do not firm part of your estate.

4. As mentioned above, the property will not form part of your estate only your shareholding. The company will not be subject to iht. You will need to consider the issue of acting as sole director and what happens on death. A second director could avoid issues of leaving the company without an officer on your passing.

Due to your overseas status and desire to use an offshore vehicle I would recommend you speak to a suitably qualified accountant and obtain detailed and specific advice.

Expert:  propertylawyer replied 8 months ago.

Any questions or queries? I am happy to assist further.

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