Sovereign assists many of its clients with the purchase and ownership of UK property assets. We advise on tax and structuring and can manage the transaction process and financing arrangements. With our knowledge of UK property ownership laws and regulations, along with our tax planning expertise, we can help clients to reduce any potential exposure.

Many people who own or intend to own property in the UK will not be fully conversant with UK legal procedures or taxes and may not fully recognise the longer-term potential exposures to capital gains tax (CGT) or inheritance tax (IHT). Issues that would-be buyers need to consider include:

  • The type of property asset?
  • The purpose of the property?
  • Who will occupy the property?
  • The legal status of the owner?

In the wake of the 2008 global financial crisis, the UK government introduced a raft of anti-avoidance measures targeting UK residential property that was owned or acquired by non-natural persons (NNPs), whether UK resident or not. These include higher rates of stamp duty land tax (SDLT) and an Annual Tax on Enveloped Dwellings (ATED), as well as increased exposure to CGT and IHT.

These anti-avoidance measures have severely limited tax planning options in respect of UK residential property. Commercial property has been largely unaffected by the new measures. If the property is part residential and part commercial, only the residential part will be subject to the new measures.

However, it is still possible to use structures to mitigate UK tax where appropriate. Sovereign has devised a number of fully compliant solutions to minimise UK tax exposure on holding or acquiring UK property, whether it is for personal use, investment, or development purposes. These involve the use of trusts, UK and non-UK companies, as well as Qualifying Non-UK Pension Schemes (QNUPS).

Sovereign UK has long experience in structuring UK real estate ownership and has built particularly close relationships, over many years, with lending institutions, property sourcing experts and law firms. We appreciate that each purchaser presents a unique set of circumstances and will work to balance their residence requirements with their estate planning needs and to structure ownership of property assets to the investor’s advantage.

Mortgage Finance, Will Provisioning and Life Insurance

There is an increasing number of specialist private lenders who are happy to provide mortgages on a case-by-case basis for non-UK residents, non-UK nationals and non-UK domiciles looking to buy property in the UK. The individual approach taken by private lenders can also be an advantage for those with complex incomes, such as income in a foreign currency or based around stocks and shares or other investments.

Any investment in UK property will create the need to make a UK will in order to address succession issues, and also to secure suitable Life Insurance sufficient to cover any outstanding mortgage finance and any future liability to UK IHT in order to prevent heirs from being forced to sell the property.

Get in Touch

Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.