Important Changes to TAX on Your Properties

In a little over 5 months time (April 2015) the UK Government are to charge 28% tax on Gains in the value of UK property held by offshore owners. Previously this was exempt from tax.

This will directly affect you and there are important decisions that must be made before then as to how you own the property to escape these new charges.

We give below the impact of the changes on different types of ownership and the costs of making a change to a new ownership vehicle that will prevent the charges form applying.

COMPANY OWNERSHIP

If your property is in a company and currently valued at £10m, and growth in value is 10% annually over the next six years then a sale in 2020 will be at a value of £17.7m. The gain of £7.7m will give rise to a tax bill of £2,156,000!

If the property is not let it is also liable to an annual tax (ATED) of £71850 with a total bill of over £400,000 in 6 years!

OTHER OWNERSHIP

This new tax will be charged on all forms of offshore ownership whether Personal, Trust, Foundation or Partnership.

Other UK taxes already apply to these forms including Inheritance (Death) Taxes that can take 40% of the value of the property if you die.  This would be over £7m in the above example

ACTION TO TAKE

We have a suitable alternative ownership method that the UK government has confirmed will be exempt from the new tax and preserves anonymity and the ability to preserve or improve the death tax position.

Action taken to move to the new ownership method before April 2015 will not require the involvement of the UK Tax Authorities and simplify administrative issues.  We urge you to contact us immediately so that we can assist you in preserving your tax free status.

Posted in English on Nov 17, 2014.