Ownership of Overseas Property Print

Where a Director has the use of an overseas property owned by a company, no benefit in kind charge will arise throughout the entire period the individual has owned the property through a company provided certain conditions are met. These are:

  • The company which owns the property has no activity other than the holding of that property for occupation, and/or letting.
  • The company’s only activities are incidental to its ownership of the property.
  • The property is the company’s only, or main asset.
  • The company is not funded directly or indirectly by a connected company.

Although there are no benefit in kind charges, it should be noted that on a disposal of the overseas property, there may be a charge to CGT as the legislation at Section 13 TCGA 1992 attributes the gains of offshore companies to shareholders who are resident in the UK, and domiciled here. This charge may be mitigated if the avoidance of UK tax was not the motive, or main motive for structuring the ownership of the property through an offshore company. Non-domiciles are able to avoid the CGT charge if they claim to be taxed on the remittance basis for the year of disposal.

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