Property aquisition and taxes

There are numerous ways to own a UK property including:

  • Directly alone
  • Directly with others as joint tenants
  • Directly with others as tenants in common
  • Through a UK company
  • Through a non-UK company
  • Through a UK trust
  • Through a non UK trust
  • Through a UK nominee
  • Through a non UK nominee

The way acquisition is structured will drive cost of buying, holding, renting, profiting from and passing a property to heirs.

Some of taxes which can be reduced or eliminated, depensing on circumstances:

  • Stamp duty: 0-15% of property value
  • Income tax: 0-45% of rental income
  • Capital gains tax: 0-28% of capital gain on sale
  • Corporation tax: 19% on rental profit and gain from re-sale
  • Inheretance tax: 0-40% of net property value (after mortgage)
  • Periodic 10 yearly tax on discretionary trust - up to 6% of net property value (after mortgage)
  • Witholding tax on interest paid abroad: 0-20% on interest paid

Right structuring is important not only due to tax reasons but also to achieve other objectives such as:

  • Preservation of a buyer's confidentiality
  • Simplification and reducing cost of selling a property or a portfolio
  • Simplification and speed of inheritance

London property
Buy to let property
Off plan property
Commercial property
UK mortgage

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