REAL ESTATE

UK property continues to be a popular investment for individuals looking to grow or diversify their asset portfolios. However, with a raft of changes to property taxation in recent years, it is vital to understand your obligations and any opportunities to streamline your affairs.

Lancaster Knox has significant experience in advising clients on efficient structures to buy, hold and sell high-value UK real estate and the associated tax consequences. Advice can also be provided to real estate investors on restructuring their real estate portfolios in order to help them navigate the impact of recent and imminent tax changes.


Residential property

Buying, holding and selling UK residential property can be an attractive investment opportunity, provided transactions are structured appropriately. Staying up to date with your tax reporting obligations is also of paramount importance.

Lancaster Knox has extensive experience in advising clients on all aspects of the taxation of UK residential property. We also work with other members of the Knox group of companies to assist with funding arrangements, holding structures and compliance matters. Our advisory services include the following areas:

The Annual Tax on Enveloped Dwellings (“ATED”), which applies to properties worth more than £500,000 held in a corporate or certain other types of structure;

Considering the impact of mortgage interest restrictions for Buy-to-Let landlords, which reduce the allowable deductions against rental income;

Structuring property portfolios, tailored depending on whether they are held for income generation, capital growth or wealth preservation;

The Inheritance Tax position of property portfolios and Furnished Holiday Lets;

Capital Gains Tax on the sale of property, including changes to exemptions for main residences and let properties.


Commercial property

Commercial Real Estate has traditionally been a sound investment offering economies of scale, additional cash flow and the potential of significant realisation of value at disposal. Many businesses also choose to operate from property owned directly.

Lancaster Knox works with real estate developers offering advice that not only considers the best holding structure for a new commercial real estate portfolio, but we will also review the position if there is an existing portfolio. We can work with fiduciary specialists to incorporate appropriate structures, either in the UK or overseas.

We are also able to advise individuals and sole traders operating their businesses from commercial property they own personally, including any personal tax implications and the impact on Entrepreneurs’ Relief.


Non-resident investors and trustees

Individuals, companies and trusts resident outside the UK continue to invest in the UK property market. With extensive changes recently introduced, it is important to keep up to date with developments and obligations.

With the introduction of the Common Reporting Standard (“CRS”), under which tax authorities share information across jurisdictions, it is vital to understand your obligations as a non-resident property owner. HM Revenue & Customs (“HMRC”), the UK tax authority, has a range of tools at their disposal to identify non-compliance by non-resident property investors, so reviewing your property interests is of paramount importance.

The team at Lancaster Knox are experts in the UK taxation of non-resident individuals, with the range of our services including:

The Annual Tax on Enveloped Dwellings (“ATED”), which applies to properties worth more than £500,000 held in corporates and certain other structures;

Extensive and complex changes to the Inheritance Tax (“IHT”) position of UK residential property from 6 April 2017, which bring interests held indirectly within the scope of UK tax;

Non-resident Capital Gains Tax (“NRCGT”) and its extension, from 6 April 2019, to commercial property held by non-UK residents directly or indirectly;

Changes to the non-resident landlord scheme, with non-UK companies being brought within the scope of UK Corporation Tax (rather than the current income tax regime) with effect from 1 April 2020;

Individuals’, directors’ and trustees’ UK compliance obligations in respect of their property interests, and assistance in making the appropriate filings to HMRC.

HOW CAN LANCASTER KNOX HELP?

At Lancaster Knox our Private Client Advisory team will be able to assist with all aspects of the taxation of UK property.

OTHER PRIVATE CLIENT SERVICES