Non-residents using an offshore company to own UK properties

UK real estate has long been an attraction for foreign investors, particularly the affluent class. Such investors have traditionally used an offshore company structure to acquire UK properties because it secures their identity. As a result, many investors choose to purchase a UK home while residing overseas through an offshore company. However, purchasing property in the United Kingdom is not simple, and there are numerous difficulties and tax structures that investors must be aware of.

Non-residents using an offshore company to own UK properties
In this article we cover:

Factors non-residents must consider while buying the UK property

Considering the numerous taxes and legal duties that must be met, purchasing property in the United Kingdom appears to be a hassle. Nonetheless, it is a fantastic investment. The following are some general aspects to consider for non-residents when purchasing property in the United Kingdom:

  1. When investing in the UK property, ensure that you have the necessary cash or a mortgage in place.
  2. Make sure you're up to date on any recent tax changes that affect property purchases.
  3. Property records are available publicly, you must double-check that the seller is legitimate and the rightful owner of the property.
  4. Check the property price against the market to determine the property's current market value.

Why Buy UK property through offshore companies?

Due to the numerous benefits associated with this approach, offshore or non-residents owning UK property is one of foreign investors preferred methods of purchasing UK property. Several significant advantages of purchasing UK property through offshore companies include the following:

  1. Capital gains tax exemption

    – If an offshore company is not controlled, managed, or observed trading in the United Kingdom, any property owned by non-UK resident firm is exempt from capital gains tax (CGT) upon sale. However, if a non-UK person owns many UK properties, they may become liable for CGT, as this acts as a gesture of operating a trade in the UK. As a result, some investors prefer to invest in a single property rather than an offshore company.

    Also See: Capital Gains tax on property sold overseas

  2. Minimum stamp duty

    – If an offshore company owns the property, the property can be sold using company shares without incurring stamp duty land tax (SDLT). It means that the buyer will acquire the company's shares, while the property will stay in the name of the offshore company.Higher SDLT rates for non-residents are 5% on amounts greater than £250,000 million (above £300,000, if you are buying a first home), 15% on amounts greater than £150,00,00 and so on. As a result, the buyer saves a significant amount of money, and purchasers frequently profit from these savings.

    Also See: SDLT changes for mixed-use buildings

  3. Identity privacy

    - When an overseas company acquires property in the United Kingdom, the property documents include the company's name as the new owner. As a result, the primary owner of the offshore corporation is not disclosed in property records. Public property information allows anyone to look for information about any property; the offshore company's actual owner benefits from identity privacy.
  4. Inheritance tax exemption

    – When a property owner dies, inheritance tax is applied to the property's net worth. If a foreign company purchases property in the United Kingdom, it is exempted from inheritance tax restrictions. This tax is only applied to individuals holding a UK property through an offshore company legally exempting the firm’s owner from inheritance tax upon their death.

    However, recent tax law reforms have extended the inheritance tax to non-UK citizens, so you should anticipate receiving fewer benefits than previous years.

  5. Less UK income tax on rental income

    – Income tax is payable on rental income from a UK property, whether owned by an individual or a business. However, the income tax rate varies in both cases. If an individual owns the property, the income tax rate increases to around 45%. While if the property is owned by an offshore company, the tax rate is approximately 19%. This is a significant difference and one of the primary reasons why international investors purchasing property in the United Kingdom for investment purposes should use an offshore company structure.

Also See: Non-Resident Tax Return


An offshore company purchasing a UK property is a profitable strategy for foreign investors. However, the UK government's policy towards offshore structures and UK property has been increasingly strict in recent years.

They are attempting to reduce property purchases in this manner by implementing various tax systems. However, the tax amendments do not mean that offshore structures are no longer advantageous. There are still plenty of advantages, which make purchasing UK property from abroad a beneficial activity. Contact DNS Accountants to know how much more benefits you as a non-resident can use in the UK through an offshore company.

If you have any queries or want specialist advice on "buying UK properties through an offshore company", kindly call us on 03330886686, or you can also e-mail us at info@dnsaccountants.co.uk

"This article was correct at the date of publication. It is intended for general purposes only and does not constitute legal or professional advice. Independent professional advice should be sought before proceeding with any transaction".

Also See: How can HMRC find out about my rental income?

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About the author
Blog Author

Owais Bombaywala
Working closely with individuals and businesses to help grow their business requires a significant amount of experience and industry knowledge. Owais is BA (Hons) Accounting and Finance and Member of ACCA. Besides being a compliance champion, he specialises in Property tax planning. With over 7 years of experience in Accountancy and Tax world, our clients count on us to give them timely and up to date advise to help them make the right move. Owais works closely with some of the DNS’s most valued clients to give them the confidence they need to focus on their business. He is known for his calm nature and proactive approach. At DNS, we proud to be a modern and client centric firm. Our advise doesn’t just look at what’s best for your business moreover our aim is to help you achieve your personal goals. Away from work, he resolve family disputes and provide care and support to elderly people. He is a founding member of Human welfare organisation Hounslow.


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