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Structuring Issues
Why buy property through an offshore company?
Because of UK Inheritance Tax (IHT)
| If you are UK domiciled and non UK resident
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If you are not UK domiciled and non UK resident
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| Buy property directly or through offshore company |
Buy property through offshore company |
| If you are UK domiciled, you are taxed on worldwide assets, owning shares in an offshore company owning UK property does not eliminate IHT. However, it does make probate easier to finalise, especially if the shares are owned by a trust |
If you are not UK domiciled, then you are taxed on any UK sited property you own. If you own shares in an offshore company, which then in turn owns the UK property, then no IHT will be payable. |
In all cases:
Complete tax returns and obtain approval from UK tax authorities to receive rental income without tax deducted at source under the Non Resident Landlord (NRL) scheme.
If you do not register under the NRL scheme,
- then your letting agents deduct and pay income tax every quarter
- if you have no agent, then your tenant has to deduct and pay the tax
Your rental income will be taxable under income tax
Qualifying expenses are deductible
- Mortgage interest is deductible, but capital repayments are not
Contact FP for the following sevices:
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