While investors welcomed the Chancellor’s decision to remove the benefit in kind tax charges payable on overseas property purchased through companies,
Simon Conn, managing director at Conti Financial Services Ltd warned potential buyers that purchasing a property abroad through a company did not mean they would be totally exempt from tax.
In addition to this, some countries have restrictions on buying property through a company so this option may not be as widespread as investors hope.
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Conn explained that, when considering the purchase by this method, they should consider all the locally based legislative implications, including inheritance tax, capital gains tax, VAT, income tax if renting out the property and the country’s equivalent of Stamp Duty.
While each country differs in the amount and type of tax payable, Conn insisted some form of tax would need to be paid locally.
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He said: “Anyone thinking of buying an overseas property through a company should take specialist independent legal and tax advice. While it may look like a great way to save on tax, there may be other taxes specific to the country in question and there may be restrictions to the type of company you can purchase in.”
