(Also known as Non Natural Persons)
The below represents the significant change in the way that the UK Government will treat the taxation of Offshore Company Owned Properties, known as Non Natural Persons.
The following changes have either already been or will be as from April 6th 2013, implemented by the UK Government:
• Have already implemented a substantially increased Stamp Duty charge (SDLT) on purchases over £2Mn of 15%, which is an unavoidable indirect tax when purchasing property in the UK. This tax is already in operation and is unavoidable in the property purchase process.
• Created a property-value related Annual Charge/Mansion Tax on properties company-owned above £2Mn, both UK & Offshore corporates. These charges will be revalued every 5 years. This change will become law in the UK on 6th April 2013
• Will impose a Capital Gains Tax (CGT) on the sale of all Offshore Company-owned UK residential properties – due to come in April 6th 2013. The seriously negative factor on top of this massive additional charge, (believed that it will be around the 28% rate), is that it will apply from the original date of purchase. In other words, a property purchased 10 years ago & now liable for capital gains, will be taxed on the full gain.
In spite of the above these devastating changes, there still remains for a short while, a window of opportunity for people either intending to buy investment property or already owning it through a Corporate entity , to avoid these costs by placing the assets into this specific type of trust.
The trusts are held in Guernsey, Malta or Gibraltar and there is only 6 months to affect this and to protect your assets within your portfolio. Both SDLT & CGT on the Transfer into the Trust are avoided.
These penalties will apply to all UK citizens, all Non-Resident expatriates & all Foreign Nationals who own property in this fashion in the United Kingdom
If you do not own investment property in a company but own genuine buy-to-lets in your own name these specific trusts arrangements are a perfect platform for you to build up your retirement wealth, to trade your assets, and to create significant retirement funds which can always be passed on to your beneficiaries entirely outside of Inheritance Tax.
All assets held within these specific trusts arrangements are totally outside of an individual’s estate. They are therefore not liable to Inheritance Tax in the United Kingdom
It should be noted that whilst SDLT cannot be avoided when purchasing properties in the United Kingdom for Non-Resident Non-Domiciles, it can be significantly reduced by the use of these very specific types of trust.
As UK Government is suggesting the possibility of further a potential asset/wealth taxes the special trust arrangements will become even more critical over the next 6 months.
Christopher Coleridge Cole IRIB (CII)
For further details and discussions, please contact
Christopher Coleridge Cole – Gresham Street Partners
UAE: Mobile: +971 (0) 50 954 7931
UK: Mobile: +44 (0)7910 565 890
Swiss: Mobile: +41 (0) 797 998 632
Robert Pugh – Lexander Management Ltd
UK Mobile: +44 (0) 780 293 9881
UAE: Mobile: +971 (0) 55 658 7478
PLEASE QUOTE “PEP/ LML” WHEN COMMUNICATING