KUWAIT CITY, Dec 15: With its concern to keep its clients interested in the residential property sector in the UK informed, Ahli United Bank organized recently a seminar in cooperation with the renowned London-based law office, Charles Russel Speeches, to shed light on the latest developments in UK tax regulations. Such changes commenced some years ago impacting residential properties owned by residents outside the UK. The seminar presented the most prominent anticipated changes to be issued in 2017, including inheritance tax on offshore companies.
In his welcoming remarks, Medhat Tawfik, General Manager of Private Banking and Wealth Management at Ahli United Bank, asserted the Bank’s willingness to organize such seminars on a periodic basis to enable clients of Private Banking to benefit from the best legal expertise in the field and which helps broaden the understanding of clients interested in UK investment.
Tawfik added: Ahli United Bank will continue its efforts to avail of all information and assistance to its clients to enable them to own UK properties minimizing the potential risks that come with owning such property, especially the implications of the tax regime.
On the other hand, Piers Master, partner in Charles Russel, , addressed the issue of UK taxes relevant to Kuwaiti citizens who already own or intend to invest in residential and commercial property in the UK.
He clarified that that UK still offers a competitive environment in terms of tax conditions despite the introduction of new and more onerous tax laws in the past few years while indicating the possibility of avoiding the legal and financial consequences to these changes by obtaining proper and sound legal advice.
The seminar also addressed the anticipated inheritance tax which concerns Kuwaiti investors and advised clients not to take any precipitative action at this stage but to explore and discuss the issues with a specialist adviser.
The seminar focused on the main UK taxes including land stamp duty, capital gains tax, income tax and inheritance tax. Piers Master drew attention to an important proposal presented during the discussion of the Summer budget on July 8, 2015 which specified a new inheritance tax pertinent to British residential properties under the offshore regime which would become effective in April 2017.
The seminar clarified that residents outside the UK , who own a residential property through an offshore company, are not currently subject to any liability towards inheritance tax on properties.
However, starting April 2017, these properties will be subject to inheritance tax for the first time in addition to the annual tax on offshore dwellings introduced in 2013.
This means that if a non-British resident passes away while owning a property in the UK through offshore companies, beneficiaries will be subject to the inheritance tax in the amount of 40% of the total value of property after deducting 325,000 pounds sterling exempted from tax. This exemption amount applies to the value of all assets inside the United Kingdom, he clarified.
The seminar added: Parties affected by the proposed changes should review their investments during 2016 when the new laws will become clearer, indicating that some investors will defer from the offshore model ownership. Others who own rented properties might obtain tax privileges.
Fahad Abu Aisha of Berkeley Real Estate Group in London shed light on the real estate market in London and the investment vision for the real estate sector in the coming period. He highlighted the main real estate projects in the British capital.
Tawfik concluded the seminar and said: Those who are interested in owning real estate in the United Kingdom should seek specialized advice to address the anticipated inheritance tax implications. He stressed the importance of clients’ knowledge of fundamental laws relevant to their real estate investments to avoid any negative consequences for the projected tax changes.