Principal Private Residence structuring

The situation facing Non Domiciled (UK Resident and Non Resident) investors in UK residential property has been materially and negatively impacted by recently announced changes to Legislation.

  • Inheritance tax (IHT) exposure on their UK residential holdings from Apr 2017
  • A register disclosing UK residential property ownership will be created and in the public domain
  • A liability to UK Capital Gains Tax (CGT) was introduced with effect from April 2015 ( this may not apply on principle private residences)
  • Annual Tax on Enveloped Dwellings ( ATED) is applied on properties held within corporate structures that are not rented out

For clients concerned about security and privacy, along with the ability to efficiently plan for succession, these rules changes are of material concern.

Berkshire Wealth in collaboration with a number of professional advisers, facilitates the provision of expert advice for High Net Worth, Non- UK Domiciled resident and non- resident individuals and families whose primary motivation is the retention of privacy of their beneficial ownership and efficient succession planning.

While expert advice will be specific to each client’s circumstances a selection of benefits that can arise are as follows.

  • Confidentiality of the beneficial ownership of the property can be maintained
  • As a result of the structuring arrangements utilising Offshore Trusts, there will be no exposure to ATED as the property will be owned by a natural person – by way of example ATED on properties valued above £20m would be subject to an annual ATED charge of more than £218,000
  • Subject to satisfying the conditions that the property qualifies as the clients PPR, there will be no Capital Gains Tax exposure
  • Depending on how the property purchase is financed, IHT may be reduced to a nominal amount at outset in a manner in keeping with HMRC guidelines for acceptable ownership structures.

It is important to note this structure is not designed to facilitate the mitigation of tax