Non-UK Domicile Purchasing UK Property
Achieves:
Zero capital gains tax (CGT) and inheritance (IHT) tax for potential purchasers of UK property.
Requires:
A non-UK domiciled individual or spouse intending to purchase a UK property.
How it works:
Instead of purchasing the property in your own name, we form a company in an international jurisdiction; the company shares are then owned by a discretionary trust. The company then purchases the property.
With the property owned by Trustees that are non-UK residents they will not be liable to CGT on the disposal of the UK property. CGT is only payable by UK residents, regardless of where the asset is situated.
For UK resident Non-Domiciles where only one property is to be acquired as a sole or main property in the UK then the property will be exempt from CGT under the 'principal private residence exemption'.
If an international company holds a UK property which a trust or individual in turn holds then the asset held by that trust or individual is a foreign asset, namely the share in the company. As foreign assets are not liable to IHT in the hands of foreigners this means that the value of the property held by the company will be completely outside the scope of UK IHT. This would even apply if the client later becomes UK resident and domiciled.