During the years of the recent property and development boom in
the Turks and Caicos Islands (TCI), stamp duty on the real estate
transactions became a substantial contributor to Government
coffers. All real estate transactions in TCI are subject to stamp
duty at varying rates depending on the size of the transaction and
on the island on which the real estate is situate. In most cases,
stamp duty is charged at the rate of 9.75% of the consideration
passing.
Most real estate in TCI is held in the name of closely-held,
sole purpose vehicles. During a previous real estate boom (in the
late 80s and early 90s), the structuring of real estate
transactions as acquisitions of equity interests in holding
companies became commonplace as a stamp duty avoidance mechanism.
To close this loophole, TCIG enacted (in 1992) the Land Holding
Companies (Transfer Duty) Ordinance which effectively imposed a tax
at the rate of 8% on any transfer of equity in a TCI land holding
company. The
