Capital gains tax on UK property

AndyGuil

antrobus wrote: »

Well you can transfer the benefical ownership as anonymously as you like (for all that might be worth), but the legal ownership of a property is (mostly) these days a matter of public record - it's down there in black and white on the Land Registry.

I'd stick to your day job if I were you.

That is exactly how it is made anonymous, they don't become the legal owner themselves. They do this through an entity. The property can change hands through this entity easily. It is similar to dark pool strategies used in trading.

cells

antrobus wrote: »

No, but they pay Corporation Tax on any chargeable gains made. Which is the same difference. And companies don't get the benefit of a CGT allowance.

Mr Russian billionaire buys mansion for 50 million now worth 100 million

Decides not to pay tax so sell it to his son for 100k

Who then sells it for 100million

Becusse its his sons only home

No cgt

Saves 28% of 50 million (£14m) in his tax bill

He also has 49.9 million of capital loses he can offset elsewhere

cells

antrobus wrote: »

Well you can transfer the benefical ownership as anonymously as you like (for all that might be worth), but the legal ownership of a property is (mostly) these days a matter of public record - it's down there in black and white on the Land Registry.

I'd stick to your day job if I were you.

Whats the difference

I own company x who owns the property

Said company has no other purpose

Its jist a way for said person to own directly oqn the company who owns the home

For all intents and purposes thr person owns the home

They go to this length simply to avoid tax or regulations


One other advantage of owning via a company is you can transfer shares a hell of a lot quicker than you can a house

chewmylegoff

cells wrote: »

Mr Russian billionaire buys mansion for 50 million now worth 100 million

Decides not to pay tax so sell it to his son for 100k

Who then sells it for 100million

Becusse its his sons only home

No cgt

Saves 28% of 50 million (£14m) in his tax bill

He also has 49.9 million of capital loses he can offset elsewhere

Mr Russian Billionaire finds out that when transferring an asset to a connected person, CGT is assessed on the market value not the consideration and he now has an enormous tax bill to pay. Mr Russian Billionaire is not pleased and your career as a tax accountant is ended by a rather long swim with some nice fish.

Generali

cells wrote: »

Mr Russian billionaire buys mansion for 50 million now worth 100 million

Decides not to pay tax so sell it to his son for 100k

Who then sells it for 100million

Becusse its his sons only home

No cgt

Saves 28% of 50 million (£14m) in his tax bill

He also has 49.9 million of capital loses he can offset elsewhere

Does this happen often?

I would have thought that setting policy around half a dozen transactions a year at most is just a bit silly.

CLAPTON

cells wrote: »

Mr Russian billionaire buys mansion for 50 million now worth 100 million

Decides not to pay tax so sell it to his son for 100k

Who then sells it for 100million

Becusse its his sons only home

No cgt

Saves 28% of 50 million (£14m) in his tax bill

He also has 49.9 million of capital loses he can offset elsewhere

as a foreigner there may be no cgt

but if they were UK people then father and son are connected people and so the father would be taxed as if sold at 100million

no cgt avoidance

antrobus

cells wrote: »

Whats the difference

I own company x who owns the property

Said company has no other purpose

Its jist a way for said person to own directly oqn the company who owns the home

For all intents and purposes thr person owns the home

They go to this length simply to avoid tax or regulations

One other advantage of owning via a company is you can transfer shares a hell of a lot quicker than you can a house

The difference is that now (due to the Finance Act 2013) if the property costs more than £2m, you have to (a) pay 15% SDLT or (b) pay an annual tax (ATED) and will be subject to a 28% CGT charge on sale.

Of course if you don't actually have a company that owns a £2m plus property none of this will be relevant to you.

antrobus

AndyGuil wrote: »

That is exactly how it is made anonymous, they don't become the legal owner themselves. They do this through an entity. The property can change hands through this entity easily. It is similar to dark pool strategies used in trading.

If the entity is a company then the property may well be subject to the new FA 2013 regime. If the entity is a trust the property may well be subject to the relevant property regime.

Please take proper professional advice before committing yourself.

antrobus

Generali wrote: »

Does this happen often?

I would have thought that setting policy around half a dozen transactions a year at most is just a bit silly.

I think it happens at least twice a week on planet Cells.:)

This thread appears to have become the playground for some wannabee tax mitigation consultants? :rotfl:

AndyGuil

If the property is held through the entity they can allow clients to buy and sell property off the records. They are effectively a holding company. The land registry sees the company name and no one elses. It remains anonymous. They don't seem to be making much from the tax so far...