The July Budget 2015 announced two further changes to the taxation of residential property. These changes will have the most impact on landlords and non-UK domiciled individuals (non-doms).
IHT and UK residential property
From 6 April 2017 all UK residential property, regardless of how it is owned, will be within the scope of UK inheritance tax (IHT).
Historically, a number of non-doms have decided to own UK residential property via a non-UK company, the shares of which are currently outside the scope of IHT for non-doms. The changes are intended to mean that these offshore structures will effectively become transparent for IHT purposes. This could result in a significant tax exposure of up to 40% of the property value or, in the case of certain trusts, 6% tax charges every 10 years.
If you could be impacted by these changes, you should start considering your options now, as in practice it will take time to understand your position, and then to identify and implement any changes to your affairs.
If you would like any further information please contact Sue Stephens.