Protecting UK property against death taxes

British tax rules for foreign nationals owning property in the UK will now leave families with a hefty tax bill when they die. Inheritance Tax or what is also referred to as Death Tax, is charged at 40% on the value of the property.

The sort of offshore structure that holds the property makes no difference - the tax still must be paid regardless of a trust, special purpose vehicle, private investment company or any other offshore entity being involved.

Many foreign investors owning residential property are now liable and should, therefore, plan accordingly.

Tax solution for foreign property investors

Traditionally, a whole of life insurance policy would meet Death Taxes for a family when the owner died.

Typically, this solution can be expensive when the cost/benefit analysis is completed so alternatives were always explored using structures. However, structures are no longer an option so an alternative insurance solution has been developed.

Variable Universal Life (VUL) has been specifically designed to meet this tax issue and solves this problem by using property as the underlying asset value for the policy. This makes the policy much cheaper than traditional insurance solutions.

Next step - a comprehensive review

If you are a non-resident, non-domiciled owner of UK residential property then there is a need to review how to protect your assets for the benefit of your family. For the full tax information, an explanation of the solution and examples of how this can benefit your property, please download our guide today or contact us.

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A guide to variable universal life