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Too hot to handle

15 January 2013 / Peter Rayney
Issue: 4386 / Categories: Comment & Analysis , Inheritance Tax , Land & property
Is it time to drop the idea of holding UK property through offshore companies? PETER RAYNEY looks at the new rules


  • Measures to combat the “enveloping” of UK properties.
  • An increased SDLT charge on higher threshold interests.
  • The definition of a “dwelling” and the exemption for property developers.
  • Be aware that the business exemptions have yet to take effect.
  • The importance of accurate reporting for the new annual residential property tax.

For many years non-UK domiciliaries have tended to hold their UK properties through overseas-registered companies.

This relatively simple form of structuring enables them to take the UK property outside of the clutches of inheritance tax (IHT) because the ownership of the non-UK situs shares becomes excluded property.

Corporate ownership of investment property also remains attractive since any net rental income can be retained at low tax rates within the company whereas it would suffer from relatively high rates...

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