In recent years the UK has implemented various tax-code changes
to eliminate some of the traditional tax benefits associated with
offshore holdings. Starting in April of this year, for example, the
UK implemented a 20 percent tax on income from intellectual
property held by non-UK resident entities in low-tax
jurisdictions.
Another rule change — and the subject of this post —
involves the practise of owning UK property through an offshore
investment vehicle such as a company or trust. This is known as
"enveloping" a property, as "the ownership sits within a corporate
'wrapper' or 'envelope'."
The new rules seek to eliminate the longstanding advantages of
this practise. This post summarizes the UK rules changes and
explains why many shareholders of UK companies are now considering
"de-enveloping" properties by transferring them to
personal ownership.
