Have UK Tax Reforms for Holding UK Real Estate Affected the Use of Guernsey Structures?
Posted: Wed Feb 19, 2025 6:40 am
The Aim of this Note
The aim of this Article is to highlight the many other reasons for using Guernsey structures, besides the mitigation of tax leakage for holding UK real estate (and other assets). In the past the focus on the benefits of using Guernsey structures was often concentrated purely on the tax benefits available, whilst ignoring other potential benefits.
What’s Changed? – Tax Reforms for Non-UK Resident Owners
Since 2015 the UK government has announced various tax reforms to more closely align the tax treatment of non-UK resident owners of UK property (both residential and commercial) with that of UK residents holding UK property.
These reforms were introduced as part of the UK government’s wider efforts to tackle tax avoidance, evasion and non-compliance and were designed to ‘level the playing field’ in terms of taxation of gains between non-UK resident and UK-resident investors in UK real estate.
Notwithstanding these reforms, investors are still free to structure their panama mobile database investments in UK real estate through Guernsey structures reducing some of the adverse UK tax implications which use of UK vehicles may incur.
Lawful mitigation of tax liabilities is still permissible.
Why the Use of Guernsey Structures Can be Beneficial
There are a number of important non-tax related reasons why structuring through a Guernsey structure is beneficial for holding UK real estate (and other assets):
The Versatility of Guernsey Vehicle Options Available
Guernsey legislation allows a versatile variety of structures that can be used. Some of the key advantages are the flexibility of the laws such as:
Companies – Very flexible company law, distributions on a solvency basis (not limited to distribution of profits), no withholding tax on distributions, re-domiciliation allowed, Guernsey corporation tax is currently 0% with no capital gains tax.
The aim of this Article is to highlight the many other reasons for using Guernsey structures, besides the mitigation of tax leakage for holding UK real estate (and other assets). In the past the focus on the benefits of using Guernsey structures was often concentrated purely on the tax benefits available, whilst ignoring other potential benefits.
What’s Changed? – Tax Reforms for Non-UK Resident Owners
Since 2015 the UK government has announced various tax reforms to more closely align the tax treatment of non-UK resident owners of UK property (both residential and commercial) with that of UK residents holding UK property.
These reforms were introduced as part of the UK government’s wider efforts to tackle tax avoidance, evasion and non-compliance and were designed to ‘level the playing field’ in terms of taxation of gains between non-UK resident and UK-resident investors in UK real estate.
Notwithstanding these reforms, investors are still free to structure their panama mobile database investments in UK real estate through Guernsey structures reducing some of the adverse UK tax implications which use of UK vehicles may incur.
Lawful mitigation of tax liabilities is still permissible.
Why the Use of Guernsey Structures Can be Beneficial
There are a number of important non-tax related reasons why structuring through a Guernsey structure is beneficial for holding UK real estate (and other assets):
The Versatility of Guernsey Vehicle Options Available
Guernsey legislation allows a versatile variety of structures that can be used. Some of the key advantages are the flexibility of the laws such as:
Companies – Very flexible company law, distributions on a solvency basis (not limited to distribution of profits), no withholding tax on distributions, re-domiciliation allowed, Guernsey corporation tax is currently 0% with no capital gains tax.