Major decline in UK homes owned through corporate structures

The number of homes in the UK valued over £2 million and owned through offshore companies has fallen by more than a fifth over the past five years. 

According to recent figures published by property group LCP, the number of homes in the UK valued at more than £2 million and held in offshore companies has dropped to 3,100, a 22 per cent decline since the introduction of new tax rules in 2013 relating to ownership structures.

“Historically, owning and holding a property within a corporate structure had financial benefits as well and enabling the owner to stay pretty much anonymous, which for famous or wealthy owners was often an important factor,” says Marcus Dixon, Head of Research at Lonres*.

However, the introduction of a new annual tax on ‘enveloped dwellings’ means that “buying and holding a property within a corporate structure is usually more expensive,” Marcus explains. Hence the increase in the number of people registering properties in their own names.

Adding to this, in April 2017 new rules were passed to say that foreigners holding residential property in offshore structures were liable to pay inheritance tax (IHT) when passing on their property.

At Beavis Morgan, we have extensive experience in advising individuals and businesses on all aspects of the property market. We act for a broad range of property investors and developers who actively need advice on how to best structure their property deals, both to ring-fence and protect their property assets, as well as to minimise the tax arising from their business operations.

It is also important to note that, with specialist advice, forethought and sensible tax planning, IHT can be mitigated. Our Beavis Morgan tax experts are available to guide you and advise on the available strategies.  

We also offer specialist services to identify business opportunities for overseas investors looking to enter the UK property and business market – and we provide a comprehensive range of professional services to help you make the most of your investment in the UK.

For further information contact Steve Govey or your usual Beavis Morgan Partner.

Source: Financial Times, 4 April 2018: Owning UK homes through offshore companies falls 22%