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French
property owned through an SCI: no benefits
in kind taxation in the UK
Gordon
Brown, the British chancellor, has at last provided clarification of
what was a worrying issue for some UK tax residents who own or wish to
purchase French property through an SCI (French property holding
company). The concern was liability to benefits in kind tax in the UK
on the basis of their ownership of that property. In last week’s budget
for 2007 it was announced that legislation in the Finance Bill 2008 is
to be brought forward in order to remove the tax charge subject to
meeting certain conditions.
The
legislative change will apply to an overseas property owned by a company
which is in turn owned by individuals. The sole activity of that
company is holding the property for occupation and/or letting. The
measure is to have retrospective effect.
Her
Majesty’s Revenue and Customs has confirmed that it will not seek to
levy this tax in the period intervening between the budget and the
legislation subject to the following conditions:
-
The property is owned by a company owned by individuals;
- The company’s only activities are ones that are incidental to its
ownership of the property;
- The property is the company’s only or main asset; and
- The property is not funded directly or indirectly by a connected
company.
28/03/2007
- Legal
update
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