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Tax benefits of buying properties in the United Kingdom through an offshore structure

There are several advantages to creating an offshore structure and protection of your property in it. Tax benefits are only one of these – Let's take a little more detail:

In offshore jurisdictions such as Guernsey and Jersey, no tax is payable on income generated outside of Guernsey and Jersey. There is no tax on capital gains, no inheritance taxes and no exchange controls, which allows easy and free transfer of funds.

Both islands are widely recognized as two of the premier international centers of finance worlds. The islands offer a first class infrastructure, a stable economy, a transparent, full access, sophisticated, modern and pragmatic legal system, and easy to courts, registries of efficient trade with advanced technology and established relationships with the United States dating back to UK a number of years. English is the primary language.

Using the property as an example let me illustrate a simple but spectacular advantage of buying property in an offshore company:

In the United Kingdom, tax property stamp duty (SDLT) is payable on the contracts of sale and purchase of property in the United Kingdom. The SDLT is payable by the buyer. Just to highlight one of the taxes the most obvious and simplistic to pay.

When a property UK is purchased and transferred to an offshore company, the stamp duty in the United Kingdom property tax SDLT is payable by the offshore company as buyer on the transaction. But when shares of the offshore company, which owns the property is eventually sold on, then SDLT is not payable in the United Kingdom by the new owner, because there is no physical transfer of the property, but only the transfer of shares to the new buyer. The shareholders of the offshore company will also not pay capital gains on the sale price of shares in any capital gains tax is payable within the Channel Islands.

The benefit stems from the economy SDLT for buyers is that it allows the seller to negotiate a better sale price for the sale of shares of the offshore company.

Many properties in the UK are owned by international companies and listed companies, investment firms and funds through a structure offshore.

Typical structures abroad in the form of a trust with a Guernsey or a Jersey company. The Guernsey Jersey or company can do business anywhere in the world, which would provide tax benefits and protection of investments and assets.

The costs of setting up a trust and corporate structure in the Channel Islands starts from just £ 1500 and you could save more than just the SDLT!

All regulatory requirements are met by the sea "Management team" that gives you peace of mind everything is in order with the structure of the business'. The annual management fee for each trust and a partnership is between £ 1500 and £ 10 000. But make sure you are dealing with a reputable management company which will provide an excellent service and value for your money! Also check on the hidden costs by requiring the management company directly!

The costs of managing offshore company include the provision of company executives, the company secretary, the treasurer of the company, care and preparation of accounts. Fees are charged extra for the time necessarily trust or society. Additional charges for the time depends on the nature of the structure, activities and structure what should be in addition to the scope of work included in the annual management fee. Some structures do not hold assets and would not involve extra work so that there may be little or no fees for overtime past.

Many well-known, recognized and reputable international companies are incorporated in the Channel Islands or element Channel Islands or the presence. A number of companies listed on the London Stock Exchange's Alternative Investment Market or other recognized stock exchanges around the world have their incorporation in both Guernsey and Jersey.

Everyone needs and consequences taxes are different and should always take professional advice. The information in this article is for information only and specialist advice should be taken on each transaction.

About the Author

Hennie du Toit is an Offshore Structure Expert and consultant lawyer at London law firm EMW Law LLP. He specialises in Offshore Structures and Trusts for Personal and Corporate Wealth Protection

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