Cost-efficient asset holding vehicle in Europe?
Healy Consultants Group PLC
10 April, 2015
Did you know the optimal route for buying UK real estate is through a Jersey company? A considerable number of investors aim to take advantage of the current rise of UK property prices driven by rather slow supply and high demand. While there are speculations about a growing real estate bubble in the UK, the Bank of England reassures the market with its stabilization policies. After all the real estate market is a key indicator for the health for any large economy.
If you do decide to purchase real estate in the UK, then youll want to purchase the property in a cost effective manner; this is where a Jersey entity will help you. Quick and easy to set up, this entity will legally allow you to:
- Negate stamp duties and capital gains tax from UK Government;
- Negate tax deductions at source for UK rental income via Non-resident landlord Scheme;
- Completely negate JPUT (Jersey Property Unit Trust) quickly and efficiently;
- Fully retain trust profits, deferring income tax on the JPUTs profits.
Further to the advantages above, we confirm that JPUT is far better vehicle for holding and managing UK residential and commercial property portfolios than a UK listed REIT. For example, great advantages of the Jersey entity include:
- UK REIT is required to list on a recognised stock exchange, while JPUT can almost list anywhere;
- JPUT is fully corporate tax-exempt;
- JPUTs have no limits on the use of debt to fund, whereas UK REITS require an interest coverage ratio of at least 1.25;
- JPUTs do not require to be UK resident
- JPUT can have only one 1 property asset in their portfolio, while UK REITs require at least 3;
- No limit on the % interest of a stock unit holder or to the types of units in the portfolio;
- Stamp duty is easily negated in both UK and Jersey
- There are no limits on the value of property rental income in a portfolio, while UK REIT require at least 74% of the value to come from property rentals.
Is there an alternative to Jersey?
A suitable jurisdiction to form a vehicle for holding of assets, including property, is a Liechtenstein trust or foundation setup. While the country does not boast favourable policies for commercial companies, the trust, foundations and other wealth management vehicles scene is expanding and provides cost-efficient solutions for foreign entrepreneurs. Great advantages include:
- Foundations do not suffer inheritance taxes;
- Foundations in Liechtenstein are not required to submit any gift taxes;
- Low capital contributions are submitted at low 0.2% tax rate;
- The Liechtenstein establishment is a convenient vehicle to hold EU assets.
For more Information on JPUT and for help on setting up and support services, visit our companys page on incorporating companies in Jersey: http://www.healyconsultants.com/jersey-company-registration/offshore-company/
We have a comparison of different kinds of entities in Liechtenstein on our website, so follow the link to learn more about foundations, establishments and commercial companies.
Mr. Petar Chakarov
Client Relationship Manager
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