non-resident CGT, not surprisingly ATEDrelated CGT takes priority as it is at 28%
rather than 20%!
Gains that are outside the scope of either
ATED-related CGT or non-resident CGT for
any reason, including gains which predate the introduction of either tax charge,
may still be liable to CGT if certain antiavoidance provisions apply. For example,
these provisions may attribute a proportion of the gains of an offshore company
to its UK resident shareholders or, in
the case of companies held by offshore
trustees, to UK resident and domiciled
settlors, or UK resident beneficiaries of the
trust.
Conclusion
No single structure will always be right
for acquiring and holding UK property.
An individual may have other, non-tax
considerations, that may determine which
structure is the best one for them. A trust
structure might be preferred from an asset
protection perspective, for confidentiality
reasons or if the individual wishes to plan
for future generations.
Also, the investor's tax attributes and
intentions for the future will determine
what is optimal in each case. This necessarily involves an element of crystal ball
gazing – in terms of how the property
will be used (for personal occupation, to
generate rental income, for capital appreciation or to quickly resell at a gain) and
where the investor and their family will be
living in the foreseeable future. With the
world becoming a much smaller place and
the investments and lifestyles of wealthy
individuals and their families becoming
progressively more international, this is
an imprecise science, the conclusions of
which should be revisited each time there
is a material change in circumstances.
70
This note provides a brief and simplified
outline of the complex tax considerations that may be relevant in relation to
an acquisition of UK property. Detailed
tax advice should be sought before
proceeding, particularly as significant
changes are likely to take effect in April
2017 that may affect how individuals will
be taxed in respect of their UK residential
property and otherwise, as discussed
above. Also, there are other UK tax rules
and considerations that a foreign investor
should consider before going ahead with
the purchase of UK property (for instance,
comprehensive anti-avoidance provisions).
The key message is that anyone wanting
to take advantage of the London residential property market must plan carefully
before investing.
Anthony Thompson is a partner and
Charlotte Knight an associate at the UK
headquartered international law firm
Wragge Lawrence Graham & Co. Anthony
heads the Private Capital team who advise
ultra high net worth international clients
on UK tax and immigration as well as cross
border estate planning and family governance matters. The team were winners of
the Private Client: Effective Team award
2014 and Anthony was Lawyer of the
year at the Citywealth Magic Circle
Awards 2014.
With offices in London, Birmingham,
Brussels, Dubai, Guangzhou, Monaco,
Moscow, Munich, Paris and Singapore,
Wragge Lawrence Graham is a full service
law firm holding leading market positions
in private client; real estate, the Alternative
Investment Market, investment funds;
construction, IP/IT; pensions and corporate
and commercial.
[email protected][email protected]
www.wragge-law.com
www.theaddressmagazine.com