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IMT question - Help needed !!!
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COB
IMT question - Help needed !!!
Hello all, (Jersey resident)
I am in a bit of a dilema about buying a property in Carvoiro. I have heard that residents of offshore havens in black listed areas such as Jersey, I.O.M and Sark have to pay a flat IMT rate of 15% on their IMT when buying a property in Portugal.
I know this rate was supposed to be applied for offshore companies only, but apparently there is a quirk in Portuguese legislation whereby this also applies to residents of those havens.
This has been confirmed by one lawyer and denied by another, furthermore I have pasted the link which also backs this up.
http://europeanpropertyportal.co.uk/Tax-Laws.asp
Is this legal?
Maybe this would be a question for Biffa, any help would be greatly appreciated as the answer will depend on whether I buy or not.
Many thanks
Chris
I am in a bit of a dilema about buying a property in Carvoiro. I have heard that residents of offshore havens in black listed areas such as Jersey, I.O.M and Sark have to pay a flat IMT rate of 15% on their IMT when buying a property in Portugal.
I know this rate was supposed to be applied for offshore companies only, but apparently there is a quirk in Portuguese legislation whereby this also applies to residents of those havens.
This has been confirmed by one lawyer and denied by another, furthermore I have pasted the link which also backs this up.
http://europeanpropertyportal.co.uk/Tax-Laws.asp
Is this legal?
Maybe this would be a question for Biffa, any help would be greatly appreciated as the answer will depend on whether I buy or not.
Many thanks
Chris
IMT
Correct!
The tax department are lumping individuals and companies together when it comes to the black list. So if you are resident in Hong Kong, Gibraltar or Bahamas etc you would pay not only 15% IMT but also 5% per year IMI.
Crazy but seems to be true!!
The tax department are lumping individuals and companies together when it comes to the black list. So if you are resident in Hong Kong, Gibraltar or Bahamas etc you would pay not only 15% IMT but also 5% per year IMI.
Crazy but seems to be true!!
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COB
IMT
Thank you Biffa,
Definately a subject that is polarising lawyers here. 2 lawyers have told me that it is impossible for a private individual to pay this rate as it is for offshore companies only ( they have asked the financias directly) and AFPOP another lawyer and yourself have taken the other view !!!
Many thanks for your thoughts
With kind regards
Chris
Definately a subject that is polarising lawyers here. 2 lawyers have told me that it is impossible for a private individual to pay this rate as it is for offshore companies only ( they have asked the financias directly) and AFPOP another lawyer and yourself have taken the other view !!!
Many thanks for your thoughts
With kind regards
Chris
IMT
As always there are differing opinions - even between tax departments however we have seen the IMI of 5% applied to an individual resident in Hong Kong.
This was challengedat the relevant tax department who said that there was "no appeal" possible against it.
The law mentions ".... entidades que tenham domicilio fiscal em pais, territorio ou regiao sujeitos a um regime fiscal claramente mais favoravel..." and the tax department seem to construe an individual or a company as being an "entidade" or entity.
The only way would be a challenge by an ndividual through the Courts I think.
Portugal have effectively blocked investment from any individuals residing in a total of 83 territories in the world!
This was challengedat the relevant tax department who said that there was "no appeal" possible against it.
The law mentions ".... entidades que tenham domicilio fiscal em pais, territorio ou regiao sujeitos a um regime fiscal claramente mais favoravel..." and the tax department seem to construe an individual or a company as being an "entidade" or entity.
The only way would be a challenge by an ndividual through the Courts I think.
Portugal have effectively blocked investment from any individuals residing in a total of 83 territories in the world!
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Guest
Re: IMT question - Help needed !!!
[quote="COB"]Hello all, (Jersey resident)
At the time of purchasing our property we were talk into an offshore company by a Real Estate agent. The Real E Agent no doubt gaining a nice commission from the blood sucking so called "management company." Later when Gibralter was black listed by Portugal, we wished to buy our property into our names, but found out that someone had removed some of our land and therefore decided not to allow anyone to alter our documents (ie. the Land Registry). Our dear very expensive annual management company (we have no doubt laughing all the way to the back) transferred our company to Delaware.
We have now found out that we can purchase a UK (England & Wales)Limited company (i.e. a Holding, Nominees Ltd Company). A UK solicitor draws up at the same time as the incorporation of the company a document confirming that the company is holding the asset for the actual benificary, in otherwords the company does not own the asset-
In our case the offshore company in Delaware is dissolved and the asset (the property) is put into the UK Limited Company. I.e. In the Uk, on your first property there is no Capital Gains. You will have to have an address in the UK as a Registered Office and any filing you can easily do yourself. I.e. there are a lot of useful booklets from Companies House to assist.
We have been quoted some £5000.00 Sterling by a well known finanical services company here in the Algarve to do the above work for us and of course their yearly fees on top for filing a few documents- All of which we can easily do ourselves. The cost to do it ouselves is around £750.00 pounds. The Reg office can be a member of our family, friend i.e. its just a mail box for companies house notifications etc
If you are buying for the first time, its even easier and not as costly in
having to transfer an asset by having to dissolve a company and then transfer it.. Hope you will find this information of some use.
OAP ECO WARRIOR
At the time of purchasing our property we were talk into an offshore company by a Real Estate agent. The Real E Agent no doubt gaining a nice commission from the blood sucking so called "management company." Later when Gibralter was black listed by Portugal, we wished to buy our property into our names, but found out that someone had removed some of our land and therefore decided not to allow anyone to alter our documents (ie. the Land Registry). Our dear very expensive annual management company (we have no doubt laughing all the way to the back) transferred our company to Delaware.
We have now found out that we can purchase a UK (England & Wales)Limited company (i.e. a Holding, Nominees Ltd Company). A UK solicitor draws up at the same time as the incorporation of the company a document confirming that the company is holding the asset for the actual benificary, in otherwords the company does not own the asset-
In our case the offshore company in Delaware is dissolved and the asset (the property) is put into the UK Limited Company. I.e. In the Uk, on your first property there is no Capital Gains. You will have to have an address in the UK as a Registered Office and any filing you can easily do yourself. I.e. there are a lot of useful booklets from Companies House to assist.
We have been quoted some £5000.00 Sterling by a well known finanical services company here in the Algarve to do the above work for us and of course their yearly fees on top for filing a few documents- All of which we can easily do ourselves. The cost to do it ouselves is around £750.00 pounds. The Reg office can be a member of our family, friend i.e. its just a mail box for companies house notifications etc
If you are buying for the first time, its even easier and not as costly in
having to transfer an asset by having to dissolve a company and then transfer it.. Hope you will find this information of some use.
OAP ECO WARRIOR
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tbbr
When puchasing our first property we were warned against " offshore ". the agents we used will not sell any such properties.
They also tell us that other agents are finding off shore properties the hardest to sell !!
Individual EU countries tax laws are coing into line with each other ( ask the German property owners in Spain about this ).
Any advantages gained from " off shore " ownership will probably decline and eventually cease.
They also tell us that other agents are finding off shore properties the hardest to sell !!
Individual EU countries tax laws are coing into line with each other ( ask the German property owners in Spain about this ).
Any advantages gained from " off shore " ownership will probably decline and eventually cease.
Property
Referring to Guests quote above I believe there may be some confusion of information here. How one would "transfer" the Delaware owned asset to a UK company in that manner under Portuguese transfer rules I cannot understand.
The CGT rules in the UK would nevr apply to a property held in Portugal.
I think Guest should check this out pretty thoroughly before making a move.
The CGT rules in the UK would nevr apply to a property held in Portugal.
I think Guest should check this out pretty thoroughly before making a move.
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Guest
Bruxy-
Guest
I AM EXTREMELY SORRY TO COME ACROSS IN ANYWAY RUDE BUT I AM AND DARE I SAY AN EXTREMELY "HONEST" ESTATE AGENT WHO WOULD ONLY TURN AWAY BUSINESS IF I COULD NOT GAIN THE DOCUMENTS THAT I AM REQUIRED TO HAVE BY LAW ON THE PROPERTY TO BE SOLD. NEVER HAVE I EVER TURNED AWAY A PROPERTY BECAUSE IT IS OWN VIA AN OFFSHORE COMPANY AND I HAVE NEVER HEARD OF ANY OTHER ESTATE AGENT WHO HAS. OFFSHORE COMPANY PROPERTY SALES MOVE NO QUICKER OR SLOWER THAN THOSE PROPERTIES NOT IN OFFSHORE COMPANIES ETC. THEREFORE AND WITH MUCH RESPECT MAY I SUGGEST THAT THE ONE WHO CALLS HIMSELF "T" ETC CHECKS WITH DELAWARE, MALTA, UK Companies Houses and/OR ANYWHERE ELSE OF A MULTITUDE OF TAX HAVENS AROUND THE WORLD to find out as I have done that despite stupid scare tatics that the OFFSHORE COMPANY IS STILL THE MOST FAVOURITE WAY TO PURCHASE A PROPERTY IN PORTUGAL or LIKEWISE A PORTUGUESE HOLDING COMPANY.
PLEASE ALL I ASK AND I AM QUITE SURE THAT I WILL HAVE THE BACKING OF ALL THE OFFSHORE OWNERS AND THEIR FINANCIAL ADVISERS THAT BEFORE "T" MAKES ANY FURTHER REMARKS, HE DOES HIS HOMEWORK FIRST.
PLEASE ALL I ASK AND I AM QUITE SURE THAT I WILL HAVE THE BACKING OF ALL THE OFFSHORE OWNERS AND THEIR FINANCIAL ADVISERS THAT BEFORE "T" MAKES ANY FURTHER REMARKS, HE DOES HIS HOMEWORK FIRST.
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Guest
jersey resident enquiry re offshore companies
Recently, a Guest wrote about transferring from Delaware to a UK Holding Company and in reply "T" commented that he did not feel that it was possible. I therefore feel that the following maybe of interest:-
Believe it or not one of the best ways still to buy property in Portugal is via an offshore company and/or the alternatives of a Portuguese Holding Company and on a new purchase the Irish Bank have a UK scheme:- One of the main reasons I think that people were caught out, was because on the original purchase either knowingly or recklessly under declared, say £50.000.00 when at today's price is worth £500.000.00 and this left the owners with a hefty bill to buy it back in their names or now like many 25 CG's on sale. So all I ask is that we keep the matter of offshore companies in prospective. I.e.not all like us used this vehicle of ownership to avoid paying taxes, in fact we are named directors and share holders and the only reason we purchased offshore was for our daugther (i.e. inheritance Tax) which of course like so much of Portuguese legislation was scraped and therefore came into force without little published and therefore warning.
We too have also been looking into the pros and cons of leaving Delaware and setting up a UK Company and the following is the information we have gathered todate:-
(1).For around £70 a UK (England & Wales) LTD company can be set up.
In our case our present company name can be purchased in the UK so it would be a simply change from LLC to LTD. See details below
(2)At the same time of the setting up of the company a legal document has to be prepared and for this we would ONLY use a solicitor in the UK.
See details of legal requirement below. Costs around £500 - £750:
(3)ONLY after the above 2 points are in place, is the Company in Delaware dissolved A Form can be downloaded from Delaware Co Hse.
At the moment we are still studying this area i.e. are there any penalities/taxes to be paid in Delaware for "disolving" the company...at the moment non have been found? We would not actually be transferring?
(4)We have spoken to a sound financial services company in the Algarve on this idea and they have said it is possible.
Further information found:-
A UK Company holds the asset as nominee. This provides anoymity and allows the asset to be owned by a structure located in a reputable jurisidiction.The UK Company would take title to the asset but simultaneously execute a nomiee declaration which makes it clear that the asset is beneficially owned by the investor or by an offshore company by the investor. Under these conditions any profits accruing to the UK Company would be outside the scope of the UK taxation because the UK law taxes according to beneficial and not legal ownership.
You will require a registered office in the UK and this can be a member of your family etc.
You will be required to file accounts, but as the company is not trading the accounts are filed at zero.Which you can easily do yourself.
On a sale on a first property in the UK you would be exempt from taxes. So no 25 CG's to pay.
If the above works, the cost to close down Delaware/LLC and set up UK/Ltd are small compared to our present position (like many) of facing a 25 per cent Capital Gains on selling, plus we can wave goodbye to the well over charged management company. I.e. Companies House UK filing is easy and there very useful free little booklets you can acquire from Co Hse to take you through the requirements. Forms can also be downloaded as and when required. Yes we still have a little bit more homework to do...so if anyone out there has been looking at the same root as ourselves, we would love to here from you.
A thought for today:- If at first you don't suceed try try again and then try even again.
OAP ECO WARRIOR.
Believe it or not one of the best ways still to buy property in Portugal is via an offshore company and/or the alternatives of a Portuguese Holding Company and on a new purchase the Irish Bank have a UK scheme:- One of the main reasons I think that people were caught out, was because on the original purchase either knowingly or recklessly under declared, say £50.000.00 when at today's price is worth £500.000.00 and this left the owners with a hefty bill to buy it back in their names or now like many 25 CG's on sale. So all I ask is that we keep the matter of offshore companies in prospective. I.e.not all like us used this vehicle of ownership to avoid paying taxes, in fact we are named directors and share holders and the only reason we purchased offshore was for our daugther (i.e. inheritance Tax) which of course like so much of Portuguese legislation was scraped and therefore came into force without little published and therefore warning.
We too have also been looking into the pros and cons of leaving Delaware and setting up a UK Company and the following is the information we have gathered todate:-
(1).For around £70 a UK (England & Wales) LTD company can be set up.
In our case our present company name can be purchased in the UK so it would be a simply change from LLC to LTD. See details below
(2)At the same time of the setting up of the company a legal document has to be prepared and for this we would ONLY use a solicitor in the UK.
See details of legal requirement below. Costs around £500 - £750:
(3)ONLY after the above 2 points are in place, is the Company in Delaware dissolved A Form can be downloaded from Delaware Co Hse.
At the moment we are still studying this area i.e. are there any penalities/taxes to be paid in Delaware for "disolving" the company...at the moment non have been found? We would not actually be transferring?
(4)We have spoken to a sound financial services company in the Algarve on this idea and they have said it is possible.
Further information found:-
A UK Company holds the asset as nominee. This provides anoymity and allows the asset to be owned by a structure located in a reputable jurisidiction.The UK Company would take title to the asset but simultaneously execute a nomiee declaration which makes it clear that the asset is beneficially owned by the investor or by an offshore company by the investor. Under these conditions any profits accruing to the UK Company would be outside the scope of the UK taxation because the UK law taxes according to beneficial and not legal ownership.
You will require a registered office in the UK and this can be a member of your family etc.
You will be required to file accounts, but as the company is not trading the accounts are filed at zero.Which you can easily do yourself.
On a sale on a first property in the UK you would be exempt from taxes. So no 25 CG's to pay.
If the above works, the cost to close down Delaware/LLC and set up UK/Ltd are small compared to our present position (like many) of facing a 25 per cent Capital Gains on selling, plus we can wave goodbye to the well over charged management company. I.e. Companies House UK filing is easy and there very useful free little booklets you can acquire from Co Hse to take you through the requirements. Forms can also be downloaded as and when required. Yes we still have a little bit more homework to do...so if anyone out there has been looking at the same root as ourselves, we would love to here from you.
A thought for today:- If at first you don't suceed try try again and then try even again.
OAP ECO WARRIOR.
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Guest