UK Residential Property Investment

Transcription

1 UK Residentia Property Investment

2 Lega information sheet UK Residentia Property Acquisition Contents Why Chares Russe Speechys? 1. Initia Considerations Why Chares Russe Speechys? Competitive pricing and fexibe fee structures. UK quaified property awyers' in the region who can: 2. Pre Pre--Exchange 3. Exchange A weath of experience and expertise in reation to tax, corporate structuring and residentia conveyancing. 4. Pre Pre--Competion 5. Competion & Post Competion project manage and/or undertake the work; act as the day to day contact; work in the same time zone and attend meetings at short notice; dea with queries, questions or concerns face to face face ; and provide biingua capabiities (our team incudes both Engish and Arabic speakers). Simon Green, Partner Head of Rea Estate Midde East simon.green@crsbaw.com 01

3 UK Residentia Property Acquisition 1. Initia Considerations Tax issues the acquisition of UK residentia property wi give rise to tax iabiities. These are set out in the tabe on page 3. Acquisition structure the most appropriate ega and tax efficient structure wi depend on a number of factors such as: Acquisition vehice wi the acquisition be through a specia specia-purpose vehice ((SPV),), trust or by an individua? Jurisdiction if an SPV or trust structure is recommended then wi this be incorporated off off--shore and, if so, in which jurisdiction? Investment or otherwise what is the purpose of the acquisition? Other factors are there any other non non--commercia factors to take into account such as famiy requirements / succession panning, confidentiaity, intended eve of occupation (if appicabe), Shari Shari ah issues etc. Financing is financing required in reation to the acquisition? Approvas are any approvas required (e.g. consent of andord if the tite to the property is easehod)? Lega assistance must be obtained in reation to the conveyance of a residentia property in Engand & Waes. As such, a aw firm wi require certain information from any new cient so as to compy with anti anti--money aundering reguations. 2. Pre Pre--Exchange Prepare and sette draft ega documents incuding (but not imited to) the sae contract. Conduct due diigence comprising investigation of tite as we as standard searches and enquiries. Prepare a report on tite summarising the resuts of the due diigence. 5. Competion & Post Competion 3. Exchange Subject to successfu due diigence, the contract is signed by the cient or by our firm (pursuant to a etter of authority). Deposit is paid by the buyer usuay 10% but subject to negotiation. Exchange means that a egay binding agreement has been created between the seer and the buyer. Neither party can withdraw after Exchange without incurring penaties. 4. Pre Pre--Competion Finaise a ega documentation such as (but not imited to) the transfer deed, mortgage deed (if required) and ease /icence to assign (if appicabe and as appropriate) and arrange their execution. Arrange for drawdown of any financing. Prepare the competion statement in reation to the required baance of monies to compete. Undertake pre pre--competion searches / enquiries (as appropriate). Transfer competion monies from buyer buyer s soicitors to seer seer s soicitor, which wi be hed to the buyer buyer s soicitors order pending competion. Competion takes pace when the seer seer s soicitors confirm receipt of the competion monies. Keys are reeased to the buyer via the agent. Ensure: Payment of the required amount of Stamp Duty Land Tax ((SDLT SDLT SDLT)) see page 3; The transfer of ownership and registration of tite at the Land Registry is competed within the prescribed period; and Any financing is registered against the property by way of a first ranking ega charge (if appicabe). Note: The information contained within the UK Residentia Property Acquisition brochure is ony intended for purchases of residentia property in Engand and Waes. 02

4 Persona names Property hed by individuas or by nominee(s) for them for confidentiaity (note a proposed register of beneficia owners may negate any confidentiaity benefits) Offshore trustees Property directy hed by offshore trustees (no company) Offshore company Shares hed by individua or hed by trustees SDLT (on purchase) ( ) Yes - progressive system: 0 125k: 0% Over 125k to 250k: 2% Over 250k to 925k: 5% Over 925k to 1.5m: 10% Over 1.5m: 12% 3% Surcharge: appies if a buyer owns any property incuding any internationay (uness repacing main residence) Yes progressive system (see eft) Depending on type of trust, 3% surcharge may be automaticay appicabe 15% over 500,000 Uness reief appies (etting, trading etc.) in which case progressive system appies (see eft) with 3% surcharge automaticay appicabe Annua charge (ATED) (every year) ( ) No No Yes for owner occupation for properties vaued over 500, Charge ranging from 3,500 to just over 220,000 (see next page) No if genuiney rented out No if owned by a property trader Capita gains tax (on sae / gift) Yes on gains accruing post 6 Apri % for basic rate taxpayers 28% for a other rate taxpayer Yes on gains accruing post 6 Apri % for basic rate taxpayers 28% for a other rate taxpayer Yes a potentia 28% ATED reated capita gains 20% rate if ATED reief appies i.e. genuiney rented or if outside ATED Inheritance tax (IHT) (usuay ony on death) Yes 40% on death (spouse exemption / mortgages / insurance / reservation of benefit) (NB oans and guarantees reating to UK property potentiay subject to IHT) Yes Up to 6% every 10 years and on distributions between 10 year anniversaries 40% on death if reservation of benefit (no spouse exemption) (NB oans and guarantees reating to UK property potentiay subject to IHT) Not currenty BUT if draft egisation is impemented as expected this year, then going forward: Yes (on the vaue of the shares) See eft for the different treatment of shares hed in persona names or by trustees (NB oans reating to UK property potentiay subject to IHT) Income tax (renta income) Up to 45% of profits after any deductibe expenses. (NB restriction of mortgage interest reief being phased in from 6 Apri 2017) Depending on which type of trust, up to 45% of net profits after any deductibe expenses. (NB restriction of mortgage interest reief as above) 20% of profits after any deductibe expenses. Note: The above tabe ony reates to residentia property purchased by non-uk tax residents and non-uk domicied persons. This is a summary ony and is accurate as at October

5 ATED (Annua Tax on Enveoped Dweings) Appies to non-natura persons (companies) owning residentia property ATED year runs from 1 Apri to 31 March Pay tax and fie by 30 Apri Reiefs for genuine commercia ettings, trading, deveopment Band for 1 Apri 2017 determined by vaue on 1 Apri 2012 (or purchase if ater) Band for 1 Apri 2018 determined by vaue on 1 Apri 2017 (existing properties must be revaued) Band Amount of tax 2017/18 500,000-1m (since 1 Apri 2016) 3,500 1m - 2m (since 1 Apri 2015) 7,050 2m - 5m 23,550 5m - 10m 54,950 10m - 20m 110,100 20m 220,350 This information has been prepared by Chares Russe Speechys LLP as a genera guide ony and does not constitute advice on any specific matter. We recommend that you seek professiona advice before taking action. No iabiity can be accepted by us for any action taken or not taken as a resut of this information. Chares Russe Speechys LLP is not authorised under the Financia Services and Markets Act 2000 or by the Financia Conduct Authority, but we are abe in certain circumstances to offer a imited range of investment services to cients because we are members of the Law Society of Engand and Waes, which is a designated professiona body for the purposes of the Financia Services and Markets Act We can provide these investment services if they are an incidenta part of the professiona services we have been engaged to provide. For information as to how we process persona data pease see our privacy poicy on our website charesrussespeechys.com. 04

6 Our Team Chares Russe Speechys is top cass in a respects." Lega 500 EMEA, 2015 Simon Green, Partner Key Dunn, Lega Executive Simon is the Head of Rea Estate for the Midde East region. Key is based in the Midde East and has significant experience in reation to acting for our Midde East cients with their residentia property acquisitions and disposas in the UK. Having been based in the Midde East since 2008, Simon speciaises in rea estate and construction matters. His main areas of expertise are arge scae mixed use deveopments and infrastructure projects (particuary PPPs), city centre redeveopments, rea estate investment, management and finance as we as hotes and hospitaity. Simon reguary advices on foreign direct investment investment from the GCC into commercia and residentia property in the UK and other parts of the word. Simon acts for a variety of corporates, financia institutions, government and quasi quasi--government entities, high profie individuas, contractors and consutants across the GCC. He has aso advised on the financing of acquisitions and deveopments using both conventiona and Isamic finance structures. 05 She has over 15 years years experience in property aw with the ast 10 years speciaising in UK residentia conveyancing, in particuar acting on behaf of buyers of new buid buid purchases. Key aso has experience in acting for high net worth individuas on saes and purchases of existing properties and advising cients in a aspects of residentia property to incude transfer of equity and re re--mortgages. Key is a Feow of the Chartered Institute of Lega Executives.

7

8 Contact Our offices For more information pease contact: London 5 Feet Pace London EC4M 7RD UK T: +44 (0) Simon Green Partner, Midde East Rea Estate simon.green@crsbaw.com Chetenham Compass House Lypiatt Road Chetenham Goucestershire GL50 2QJ UK T: +44 (0) Guidford One London Square Cross Lanes Guidford Surrey GU1 1UN UK T: +44 (0) Doha Pam Tower Foor 15 West Bay PO Box Doha Qatar T: Dubai Index Tower, West Tower 11th Foor, Unit 1108 P.O. Box DIFC, Dubai, UAE T: Geneva 9-11 rue du Prince 1204 Geneva Switzerand T: +41 (0) Hong Kong Unit 1002, L10, 1 Dudde Street, Centra, Hong Kong T: Luxembourg 2 rue Jean Monnet L-2180 Luxembourg T: Manama Bahrain Word Trade Center Foor 24 East Tower PO Box Manama Kingdom of Bahrain T: Paris 41 Avenue de Friedand Paris France T: +33 (0) Zurich Basteipatz Zurich Switzerand T: +41 (0) charesrussespeechys.com Chares Russe Speechys LLP is a imited iabiity partnership registered in Engand and Waes, registered number OC311850, and is authorised and reguated by the Soicitors Reguation Authority. Chares Russe Speechys LLP is icensed by the Qatar Financia Centre Authority in respect of its branch office in Doha and registered in the Dubai Internationa Financia Centre under number CL2511 and reguated by the Government of Dubai Lega Affairs Department in respect of its branch office in the DIFC. Chares Russe Speechys LLP LLP s branch office in Hong Kong is registered as a foreign firm by The Law Society of Hong Kong. Any reference to a partner in reation to Chares Russe Speechys LLP is to a member of Chares Russe Speechys LLP or an empoyee with equivaent standing and quaifications. A ist of members and of non non-- members who are described as partners, is avaiabe for inspection at the registered office, 5 Feet Pace, London, EC4M 7RD.