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Naveed Khan
Naveed Khan,
Category: UK Property Law
Satisfied Customers: 7
Experience:  Attorney - Freelancer at ELANCE
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I have purchased flat under construction under my personal

Customer Question

I have purchased flat under construction under my personal name . I actually was hoping later and before flat completion to register flat under my company name. The flats handover coming next month and when I requested from my Solicitor to register under my company name she said there will be a 3% tax . I thought of co signe flats with my wife to scape inheritance tax but she also said a 3% tax will apply . Please advise my on the best way to scape inheritance tax with minimum tax and fees knowing that my country does not apply any tax so either off shore or my company in my country it's not going to make any difference to me
Submitted: 3 months ago.
Category: UK Property Law
Expert:  Naveed Khan replied 3 months ago.
Thanks for your question. How soon you need to transfer this flat to your company?
Customer: replied 3 months ago.
It does not matter . I care about paying less taxes and less fees
Expert:  Naveed Khan replied 3 months ago.

Thank you for your query.

Please note that the UK tax regime for non-residents investments is extremely favourable. If the property (or indeed a portfolio of properties) is acquired by an offshore company, then the UK property asset is converted into a foreign-situs asset (the shares in the offshore company) for Inheritance Tax purposes. Note, that individuals who are domiciled in the UK are subject to inheritance tax (IHT) on their worldwide assets, no matter where they are resident. Individuals who are neither domiciled nor deemed domiciled for IHT purposes, and trusts settled by such individuals, are also subject to IHT, but only on assets they own directly in the UK. Foreign assets owned by non-doms and such trusts are excluded from the scope of IHT – such assets are referred to as excluded property.

Hope this answers your question. If you need further clarification please let me know.

Customer: replied 3 months ago.
Sorry but my question was not answer in full. In my case , is my Slicitor is right regarding 3% tax. Is there any other solution to avoid inheritance tax on personal purchase
Expert:  Naveed Khan replied 3 months ago.

Your solicitor is wrong. THERE IS NO INHERITANCE TAX on property acquired by an offshore company.

At present, more often than not, UK residential property is held within an offshore company by those not domiciled in the UK, to avoid UK inheritance tax. The government proposes that, from 6 April 2017 the value of shares in ‘closely-held’ offshore companies attributable to UK residential property will be subject to inheritance tax. The proposals are subject to consultation on the detail.

Customer: replied 3 months ago.
Please read my first question carfully. It's clear to me that inheritance tax apply for personal investment . My question since I already purchased under construction property on my name . How could I avoid inheritance tax. My solicitor is saying that there will 3% to change ownership to company or even to put my wife is co owner. Please advise

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