UK property - the taxman cometh... again

Tim Searle | 12 November 2017

Regardless of where you live, nationality, domicile and so on, the noose on UK property tax continues to tighten. Brits have known this for years but now the target is all foreign nationals regardless of how the property purchase was structured. Perhaps this fact has been a tad overshadowed of late by all the news on the Panama Papers, Paradise Papers and the usual Corporate conglomerate doing the usual avoiding (not evading).

As a result of the recent Finance Bill, the 40% death tax bill will be levied regardless of the the owners domicile/nationality and whether the property is in a Trust, Offshore Company or similar special purpose vehicle. It is estimated that there are over 100,000 residential properties in the UK that are owned by offshore structures which have now become redundant in light of this legislation.

So if you have a £10,000,000 property portfolio in the UK, regardless of of how it is structured, regardless of where you come from, your family will be looking at a £4,000,000 bill on your death. It is important to note, that you cannot sell the property to pay the bill since the Revenue want it paid before it is passed to your estate. I am sure you are swallowing hard whilst reading this but the fact is Death Tax is very real for anyone who owns property in the UK. I am not going to even touch on the subjects of ATED, CGT, IHT, Stamp etc suffice to say that if you are ever having trouble sleeping then familiarise yourself with these acronyms in the UK HMRC website.

There is a silver lining, albeit slim, but it does require some serious planning and effective understanding of this legislation to ensure you protect your property assets so you can avoid (that's the legal term again!) some serious bills and pass on your property as you intended.

Tags: tax tax planning panama papers IHT paradise papers

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