For many years it has been customary and sensible for non UK-domiciled persons to purchase UK property in the name of an offshore company. This allowed the buyer to avoid UK Inheritance Tax (IHT) which would otherwise be payable on the death of the owner at 40 per cent of the value of the property (after allowances). An additional benefit of buying this way was that resale of the property could be affected by transferring the shares of the company, leaving the title to the property unaltered. This allowed the buyer to avoid stamp duty (now called Stamp Duty Land Tax or SDLT), so made the purchase cheaper for the buyer, or allowed the seller to charge more, or a bit of both.
Another advantage of corporate ownership is confidentiality. Details of the owners of UK property appear on a public register. Many like to keep their affairs private so purchasing through an offshore company allows the identity of the “real owner” to be hidden.
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