Dubai PR Network, Online Press Release from Dubai and Middle East
 
Property & Real Estate(Real Estate & Retail)
Filter PR by
  
Those investing in UK property could be hit by new legislation
 
  • Middle East investors in the UK property market may be hit by a change in legislation. 
  • The change, which comes into effect on 6 April this year, could see investors’ families/beneficiaries lose out on 40% of their property value. 

Dubai, UAE, March 2, 2017:  New UK legislation coming into effect from 6 April 2017 could impact thousands of people living in the Middle East. The change will affect non-UK domiciles who have invested in the UK property market through an offshore corporate structure – such investors may need to take action.
For people in the region, the UK Property market has been a popular investment choice, especially London where growth continues to be strong. The average house price has risen over 65% in London in the last 5 years*. A common way for people living in the Middle East to invest in the UK property market is through an overseas corporate structure or trust. This process is often referred to as ‘enveloping’.

Currently, non-UK domiciles who hold UK property through an overseas corporate structure will benefit from the investment being exempt from UK inheritance tax (IHT) on death. With UK IHT at a rate of 40%, these corporate structures have grown in popularity as investors look to take advantage of the favourable UK property market in a tax efficient way.

The new legislation will mean the UK tax authority (HMRC) will essentially be able to ‘see through’ these overseas corporate structures, making them ineffective from an IHT planning perspective. As a result, anyone holding UK property through such a structure will have their estate be liable to UK IHT on the asset upon their death, and should seek professional advice on how best to meet this liability. Wealthy individuals are often asset rich but cash poor, so taking steps to ensure liquidity upon death, such as setting up a life assurance policy in trust, could help beneficiaries meet the tax liability.

People holding these overseas corporate structures should also seek professional advice to review their next course of action, as without the tax advantages, these structures require careful consideration.

The new legislation essentially brings the IHT rules between UK domiciles (UK expats) and non-UK domiciles investing in UK property into line. UK expats have never been able to invest in these offshore structures to avoid UK IHT, and have always been liable to UK IHT on their UK and worldwide assets on death.

Estate planning is an important consideration for UK expats, who look to mitigate their IHT exposure and help ensure beneficiaries have liquidity to meet any tax bills on death. This same level of estate planning is now necessary for non-UK domiciles investing in the UK property market through an offshore structure, as many may now need to plan for a future IHT liability for the first time.

David Denton, International technical sales manager, Old Mutual Wealth, comments: 
“There appears to be little awareness among investors for this imminent change in legislation, and could result in beneficiaries being hit with an unexpected tax bill. UK IHT is charged at 40%, so it is important that investors take professional advice to ensure adequate provisions are in place and funds are available to their beneficiaries to pay any future IHT liability.”

*Source: Office of National Statistics, house price index, December 2016. Average house price Dec 2011: £292,000. Average house price Dec 2016: £484,000.

Posted by : Dubai PR Network Editorial Team
Viewed 6381 times
PR Category : Real Estate & Retail
Posted on : Thursday, March 02, 2017  11:33:00 AM UAE local time (GMT+4)
Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of DubaiPRNetwork.com.
Previous Story : Thirteenth edition of International Property Show 2017 to fe...
Next Story : Dubai Real Estate Institute Advances the Region's Real Estat...
Email this article Print this article

Share this article with your friends and followers
NewsVine
Back to Section Home

Related Stories



 
 
Most Viewed Press Release posted in the last 7 days
Middle East and African beauty and personal care market to grow to US$34.5 billion by 2021... [11139-Views]
Chloé eyewear introduces the new "Nola" sunglasses collection [10364-Views]
IKEA Introduces Limited Edition ‘Art Event 2017' Contemporary Drawing Collection [10303-Views]
Dubai Design & Fashion Council Launches DDFC Membership to Support Sustainable Development... [9010-Views]
COÉGA Sunwear Teams Up With GO Sport on Exclusive SS17 Swimwear Collection [8955-Views]
Nautica Spring 2017 Collection [8040-Views]
Paule Ka Launches New Fall/Winter 2017 Collection in Dubai [7887-Views]
TRESemme Hair Academy Launches in Arabia with Georges Mendelek and Alanoud Badr [7881-Views]
Win up to 30 Kilos of Gold in 18 Days at Malabar Gold & Diamonds [7668-Views]
Tame Your Beard with The Art Of Shaving [7046-Views]
Mövenpick Hotels & Resorts' Pakistan Presence Blooms as Firm Signs New Property in th... [6991-Views]
Al-Futtaim Motors launches the UAE's first hybrid truck [6899-Views]
World's first reinforced Arc7 class LNG carrier maiden port calls go smooth as ice, thanks... [6344-Views]
ESCADA Amelia - Diamond timepiece [6167-Views]
H.H. Sheikh Ahmed lays foundation stone of Silicon Mall at Dubai Silicon Oasis [6118-Views]
Global Innovations on its first day of success during the Arabian Travel Market 2017 [6082-Views]
HP Inc. launches World's Most Advanced and Secure A3 Printers in the UAE [6057-Views]
Alice + Olivia by Stacey Bendet takes over the W Café Doha [6033-Views]
Denim Days with GUESS and F&F [5899-Views]
Michael Kors Collection Transeason 2017 [5886-Views]
MASSIMO DUTTI SS17 inspires an essential piece for Massimo Dutti women [5758-Views]
ArabianTravel Market: New partnerships and tailored services for Middle Eastern guests [5722-Views]
French Label ba&sh Launches Stunning Capsule Collection [5655-Views]
Dubai to welcome largest Arabian Travel Market yet [5520-Views]
Godiva Ice Cream [5429-Views]
 
RSS Facebook Twitter LinkedDin
 
Top Sections
 
Top Stories