Property held via a UK Company - Good News!

[Mexican Pete]

Just a thought for anyone out there who hold their property through a UK incorporated company. Due to a change announced in last year’s Pre-Budget Statement, the issue of a Benefit in Kind being assessed on Directors or “Shadow Directors” were a company has been set up solely to hold the property, has been removed. If, like me, you set up a nominee arrangement with a Fiduciary in order to overcome the Benefit in Kind issue, you can now safely end the arrangement and save yourself the Fiduciary’s fees. I’ve been paying several hundred pounds a year for too long! Administering a dormant, shell company is very straightforward and easily managed by anyone with even a very basic understanding of company law.

[biffa]

There is more to this than first seems and I think anyone should take some careful advice before discarding any nominee or fiduciary services to save some money. If pure short term cash saving was the main idea it may have been better to have bought in own name rather than through a company.

[Mexican Pete]

Hmmm Interesting! What do you know Biffa that my UK accountant doesn’t? I certainly took advice and even the fiduciary acknowledged that there was no benefit in continuing with the nominee arrangement and my UK accountant agreed. I fully understand the other benefits of holding the property via a company and have no intension of doing anything to jeopardise that.
I would be very interested to hear your specific reservations in dispensing with nominee or fiduciary services.

[biffa]

There are several issues that may or may not apply in your case but which should be considered. If you act as director and shareholder in your own right then you could make the company managed and controlled and thus taxable wherever you lived. This may not affect you but if for example an Irish person did that then the company would become effective for tax purposes in Ireland which may not be beneficial even for a "nominee" company. Perhaps more pertinent is when you come to "sell". It normally gives comfort to a buyer to see a professonally licenced and independent service provider having acted as fiduciary rather than yourself. If you are selling it is harder to give warranties as to what the company has done if you are also director as you may be considered to have a vested interest in giving those warranties. Really this is a case by case thing and if you have taken advice then I feel sure in your case it is ok. My comments were intended to others not to simply jump in. Incidentally by losing the "fiduciaries" you should not lose the "nominee" aspect I think as company should continue to hold property as a nominee or bare trustee for you the owners.