This blog post provides an overview of how individuals can legally enjoy the trading profits from their UK commercial or residential development projects without suffering any UK tax costs.
Planning Overview
The planning (broadly) operates as follows:
- The property development activities would be undertaken by a UK private limited company (Company) of which the individuals would be the directors and shareholders.
- The Company would shelter its taxable trading profits through the use of an offshore trust (Trust).
- The Trust would appoint a UK corporate investment manager (Manager) which has fiduciary powers of control over the profits / monies held by the Trust. The individuals would be the directors and shareholders of the Manager.
- The individuals would extract the sheltered trading profits through the use of commercial loans from the Manager.
UK Tax Benefits
- No corporation tax is payable on the development profits.
- No income tax is payable on the profit extractions (via the use of loans).
- No corporation tax is payable by the Manager.
- The planning is based on established case law, tax legislation and tax practice.
- The planning has a long history of successful use.
- HMRC accept the technical analysis.
Summary
This tax planning allows property developers of both UK commercial and residential property to legally enjoy their development profits without suffering any UK tax charge.
If you would like to schedule a free 30 minute telephone consultation to see if you qualify for this form of tax planning, please contact Simon Newsham at Newshams Tax Advisers on 020 3151 0650 or email him at simonnewsham@newshams.com
Newshams Tax Advisers
