ARTICLE · 13 JULY 2016

Tax Implications Of De-enveloping

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Many non-domiciled individuals own UK residential property through an offshore company/trust structure as these types of structures have, until recently, afforded many tax benefits.

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Many non-domiciled individuals own UK residential property through an offshore company/trust structure as these types of structures have, until recently, afforded many tax benefits. However, the lack of transparency regarding the true beneficial owners has led the UK government to seek ways to discourage their use and to encourage UK property to be held personally.

One way the government sought to achieve this was to introduce legislation that significantly increased the tax burden of UK residential properties owned through offshore structures. For many taxpayers, the increased tax charges now mean that it is no longer viable to continue to hold UK property in this way, and taxpayers are now considering dismantling such structures.

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