The use of offshore investment vehicles through which to make investments in real estate offers significant benefits to investors – principally tax and stamp duty savings, tax transparency, liquidity, risk spreading and light regulation – and is becoming increasingly popular throughout the property industry.
The consultation process announced in this year’s Budget in relation to stamp duty, which proposes moving the focus of stamp duty from a documentary tax to a transaction tax, which would in turn bite on transfers of substantial interest (i.e. 70% or greater) in structures primarily holding UK property, will undoubtedly represent a real challenge in terms of stamp duty planning going forward. It will also change the way in which offshore structures are used in stamp duty planning arrangements.
