Overseas property buyers could get a tax break

Company ownership is a popular way of avoiding 'heir tax' laws in France and some other EU countries, which require that part of the property must be left to dependents.

Because the home is considered to be the property of the company, staying in it would have been considered a company 'perk' subject to benefit in kind tax.

The draft legislation, first proposed in the 2007 Budget, will remove the charge where property is owned for the sole purpose of occupation and will be applied retrospectively to 2003.

'There are some details to iron out during consultation but the basic framework appears promising,' said PricewaterhouseCoopers tax partner Leonie Kerswill. She added she was 'delighted' with the outline of the proposals and said that the previous tax requirements had created a 'strange situation' for people who had paid for property.

A spokeswoman for KPMG speculated that the clarification may be an attempt to clear up loose ends following a recent tax clampdown on undeclared overseas assets.

The consultation on the draft legislation closes on 5 October.

Courtesy: CityWire

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