TAX SERVICES
We can help your clients avoid their holiday home dream turning into a taxation nightmare.
The main points to consider are:
1. Inheritance Tax.
In many countries, real estate situate in that country is subject to local estate / inheritance tax in the event of the death of the owner. In other words, a UK person who owns a Spanish villa would be governed by Spanish Inheritance tax laws on that property in the event of his death. For more valuable properties it is important that this problem is addressed.
This is usually achieved by:
(i) owning the property through an appropriate corporate structure
or
(ii) creating a local mortgage against the property to mitigate the impact.
2. Capital Gains Tax.
Overseas properties are frequently purchased as an investment. It is therefore important that both UK and overseas taxes on capital gains are minimized when the properties are sold. We have several strategies for mitigating this taxation.
3. Local Anti-Avoidance rules.
Many overseas countries impose punitive annual tax charges on the owners of properties that are structured via ‘offshore’ companies. Spain, Portugal and France all have anti-avoidance regulations that make ownership via an offshore company unattractive.
In some cases, it may be preferable to utilize on onshore corporate owner rather than on offshore company as in the past, alternatively personal ownership in conjunction with a local will may be most appropriate.
Sometimes an on onshore / offshore combination may provide the best solution.
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