Buying A Property Overseas: An Update

In our last newsletter, we looked at a potential tax trap when buying overseas property through a company. Now there’s further legislative news that could affect property holding companies.

Many people in the UK have acquired offshore property by purchasing shares in a company or similar vehicle, which, in turn, owns the property.

Unfortunately, this type of arrangement created a potential UK tax charge on the basis that the individual was acting as a director or shadow director, and the company was making the property available to the individual by virtue of his or her ‘employment’.

To rectify this, legislation will be introduced in the 2008 Finance Bill which will disapply the benefit-in-kind charge retrospectively if all the following conditions are met.