New draft legislation to be included in the 2013 UK Finance Bill will introduce a new charge, referred to as the Annual Residential Property Tax. This new tax, which will enter into force on April 1, 2013, applies only when specific conditions are met, such as:
1. The property in question is of a residential nature, and is located within the UK;
2. The ownership of said property is held by an offshore company (except when acting as a trustee of a trust or as bare trustee), a partnership where one of more of the members is a company or a collective investment scheme; and
3. The property in question is worth more than £2 million.
This new tax will amount to a maximum of £140,000, depending on the value of the property and additional taxes, such as Capital Gains tax and Stamp Duty Land Tax, may apply if the land held by the offshore company is sold.
These legislative changes create an issue for non-domiciled individuals who, through offshore companies, hold UK property priced above £2 million. Deploying a timely solution.
Since time is of the essence, there are two (2) clearly identified routes of action: assume individual ownership of the UK property or modify the current offshore property holding structure.
In the latter case, the Mossack Fonseca Group is able to offer asset planning structures, which may include BVI Trusts and/or Private Trust Companies.
The proposed vehicles are extremely useful for the creation of solid, reliable and cost-effective schemes.
In collaboration with your UK tax advisor, we can help identify and deploy the solution best suited to your specific asset planning needs.
Please do not hesitate to contact us at firstname.lastname@example.org, should you have any questions or comments.
Cardwell Advisory Desk