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The increasing costs of de-enveloping residential property

Claire Weeks and Dominic Condé-Cole (Maurice Turnor Gardner) explain why it’s now a very good time to consider de-enveloping in order to mitigate the increasing double tax costs.

Background

Holding UK residential property through a non-UK company has historically offered a number of UK tax advantages depending on the residence and domicile status of the shareholder. The focus of this article is individuals who are both non-UK tax resident and non-UK domiciled. The period since 2012 has seen a gradual erosion of these benefits and an increase in the tax exposure of corporate holding structures for such individuals.

1. SDLT on property purchases

FA 2012 introduced a 15% rate of SDLT for certain non-natural persons purchasing residential property for consideration exceeding £2m (with the threshold reduced to £500 000 in 2014). This was a significant disincentive for those wishing to purchase a property...

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