Residential Property Abroad

It is increasingly common for individuals to own more than one property and in many cases the first investment after the family residence is in a holiday home. Whether you are buying a place in the sun, a country retreat or a city centre apartment, if it is in a foreign country you will be exposed to an unfamiliar legal system and to taxes in the country concerned. It is therefore important, even before a contract is signed, to decide whether to make the purchase in your personal name or through a company. To change course later will always be expensive. It is however usually possible to reduce exposure to tax.

Buying in a personal name

Assuming the property is for personal occupation, the form of tax, which is most easily avoided, is estate or inheritance tax. The death of the person in whose name the property is registered will normally give rise to a liability which may exceed 40% of the value at the time and the tax will usually have to be paid before the property can be sold or transferred.

Buying in a corporate name

If, however, the property is purchased in the name of a company, the death of the owner does not create a need to transfer the property. The property will be owned by the company, and it is the shares in the company which will form part of the owner's estate and not the property itself. If the company is formed in an offshore territory, the British Virgin Islands for example, which does not impose taxation on non-residents, the objective of avoiding foreign death taxes will have been achieved. There is a bonus, in that the name of the owner of the company need not be a matter of public record, thereby maintaining confidentiality.

Ownership through an offshore company will also ensure that, on death, the property will pass to the intended heirs. It will overcome the forced inheritance provisions found in the civil law and in Sharia law.

Purchasing through a company does increase the cost. The purchase may attract a higher rate of stamp duty, the company will need to be professionally managed and it may be required to file a tax return. These costs are however generally modest in relation to the potential tax saving.

Some words of caution

Some countries, whether in an attempt to prevent tax evasion by their residents, as part of increased international co-operation against tax avoidance or merely to raise revenue from non-voting foreigners, impose taxes on a notional income of companies incorporated in tax- free centres, but not against companies formed in taxing locations. Examples are France, Spain, Portugal, Greece and Argentina.

Others, such as the U.K. have hit on the wheeze of taxing their residents on a notional benefit, where the property is owned by a company rather than by the taxpayer personally, and no occupational rent is paid. Foreign investors in U.K. property are not discriminated against however. The answer, as always, is to take advice before acting.

The Chesterfield Group provides a full range of trustee, and corporate advisory, formation and management services and invites enquiries. More particulars can be found on our web-site http://www.chesterfield-management.com REF=CH4EZ

---

You Dont Need Health Insurance!

Seems almost every situation in our lives is centered on... Read More

Home Inspectors: 5 Tips to Choosing the Right One

Choosing the wrong Home Inspector can cost you a lot... Read More

Property Investing Secrets 2

Property Investing Secrets:How You Can Turn A Below Average Deal... Read More

Can I Sell My Private Mortgage Notes?

In this country millions of homes are sold every year.... Read More

French Property - a Buyers Guide to Purchasing Property in France

The CompromisThis document is the document you will sign agreeing... Read More

How To Sell Your Home FSBO

You decide to sell your home and believe you can... Read More

Purchase Your First Home with Confidence

If you are making the transition from renter to homeowner,... Read More

Investment Real Estate -- A New Twist: Be the Bank, Not the Landlord, and Get Rich Without the Work!

I was a landlord for a decade, and I believe... Read More

How To Get The Best Rental Accommodation In The Area By Using Your Capital

My report is for you to use your power to... Read More

Termite and Moisture Damage Not Reported

I have done so many appraisals where I saw obvious... Read More

Investing in Real Estate Vehicle for Wealth Building

Real estate is one of the best vehicles of building... Read More

How Much is that House in the Window?

With the recent release from the UK's biggest mortgage lender,... Read More

Searching For Maui Beachfront Houses?

Who wouldn't want to move into a Maui beachfront house?... Read More

A Log Home Story

Solving problems while maximizing valuesThis story has a few good... Read More

Internet Battleground for Future of Residential Real Estate

Real estate agents are gearing up to face the biggest... Read More

Real Estate Investing Myths That Steal Profits From Your Pocket

One of the things that distresses us about our industry... Read More

Kings Bay Georgia Real Estate - An Amusing Tale About a Real Estate Agent

This story is true and not meant to hurt anyone,... Read More

Real Estate Value: Knowing yours is Key to Mortgage Success

The value of the real estate you own, whether it... Read More

What is a Home Inspection?

Any Sally and Sam Homebuyer can look at a home... Read More

Sell Your Home Without Paying Any Commissions

All of us know that real estate commissions can work... Read More

Property Investing Secrets 7

Property Investing Secrets:How Buying Real Estate Is Like Planning a... Read More

Real Estate Tax Incentives

Lower Your TaxesTax incentives for real estate investors can often... Read More

Crossing the Gap from this Home to the Next: Bridge Loan

So you're thinking of getting into a bigger house. You... Read More

Why Commercial Real Estate is the Hottest Retirement Asset

For small business owners, commercial real estate investment is the... Read More

Real Estate Investing in Rentals ? the $10 Million Real Estate Investing Mistake

Renting to tenants is no longer "where the money is"... Read More

Buy or Sell First?

When it comes to home buying, the ideal situation would... Read More

Real Estate Bubble: Fact or Fiction?

The real estate market buzz across the country these days... Read More

Peace of Mind for Home Inspections: Choose the Right Inspector!

As sure as the spring flows at The Fountain of... Read More

Selling Your Home - A FSBOs Guide to Keeping It Safe

Sellers need to keep their safety in mind when prospecting... Read More

How To Give Yourself A $20,000/Year Raise Without Asking Your Boss

Why without asking your boss? Two reasons, one, he or... Read More

Apartment Financing Explained

So you're interested in entering the world of property management?... Read More

Finding A Capable Agent To Meet Your Real Estate Needs

Whether you're a first-time buyer, selling your current home or... Read More

Selling Houses: The Basics of Design Psychology

I'm often asked about the basics of Design Psychology, which... Read More