For many years, an attractive way for overseas investors to hold
UK investment property has been through the use of an offshore
vehicle. Jersey has seen many such structures which remain
attractive today. As a non resident landlord, the net rental income
is charged under income tax rules at a rate of 20 per cent with
opportunity to shield much of the rental income with appropriate
debt arrangements. The added attraction is of course that there
will be also no capital gain taxable on the onward sale of the
property provided the company can demonstrate that its management
and control rest outside of the UK.
There will still be many overseas investors owning UK investment
property through a UK resident company. The current market
conditions may; however, mean the property is currently valued at
or below cost and there is now an opportunity to move the property
offshore without crystallising any capital gains tax charge in the
UK. All future gains in the offshore company will then be
If the restructuring is undertaken within the activities of an
overseas group of companies, and there is not the intention to sell
the property within three years, there also exists the possibility
of Stamp Duty Land Tax being avoided through the application of
group reliefs that are available.
With a reduced rate of tax on income, no future capital gains
tax and no transfer tax payable, the current market value of real
estate may throw open an opportunity to restructure a client's
UK real estate holding structure.
There exist many other issues that will need consideration,
particularly if the property has been provided as security for
borrowing, but it must be worth enquiring.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The process for obtaining planning permission for development of property in the Cayman Islands has been updated as a result of the latest revision of the Development and Planning Law and accompanying regulations (July 2015).
In principle, when the parties agree to arbitrate, they shall be
bound by that agreement. It should therefore follow that when a
party initiates arbitration proceedings, the other party - the
respondent – will avail itself of the opportunity to present
its case and participate in the proceedings.
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