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bigduckontax
bigduckontax, Accountant
Category: Tax
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I have a house in surrey registered in my name and my wife.

Customer Question

I have a house in surrey registered in my name and my wife. We are from Malaysia. I think we should transfer to a trust company for tax purposes? Can he advise? Zaid
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello Zaid, I'm Keith and happy to help you with your question.
Is this your sole or main domestic residence?
Customer: replied 2 years ago.
This is my holiday home. We are resident and citizen of Malaysia and only use the house in Surrey in summer
Expert:  bigduckontax replied 2 years ago.
If you spend more than 183 days in the UK in any one tax year than you are classed as resident. If you spend less than 91 days in any tax year in the UK then you retain your non resident status.
As a non resident you would be liable to Capital Gains Tax (CGT) on the gain made on the ultimate sale sale of your house from a 6 April 2015 valuation. You also have an 11.1K Annual Exempt Allowance (AEA) to offset this gain. CGT would be levied at 18% or 28% or a combination of the two rates depending on your UK income including the gain in the year of sale.
Trusts are also exposed to CGT, but at a rate of 28% and have no entitlement to an AEA. I would suspect that the conveyancing costs and the additional 10% difference in the tax rates, not to mention the appointment of trustees and the running costs of the trust would preclude any transfer to a trust as an exercise in financial futility.
Customer: replied 2 years ago.
Good quick response. However if I register the house in company name, then I would not be liable for inheritance tax. Is ghis correct?In other words the conveyancing and stamp duty charges justify putting the house in the name of a company. Please advise
Thanks
Expert:  bigduckontax replied 2 years ago.
But your interest in the company would still be liable for Inheritance Tax on your demise. Of course, were you to so arrange the company that the shares were in the hands of your long term intended benficiaries then this would be avoided were you to survive the gift by seven years, but you would loose control of the property and possibly its use. It could be sold from under your feet.
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bigduckontax, Accountant
Category: Tax
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Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your excellent support.

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