Offshore Investment Strategies

Look through legislation

Here come the catches. Most of them apply to all uses of offshore companies, rather than just to the tax-efficient ownership of UK property. The first and biggest is look-through. Many jurisdictions have enacted so-called ‘look-through’ legislation, whereby they can look through company (and trust, and other) structures to identify the chain of benefit linking the underlying asset (the property, in this case) with the beneficial owner (you, as shareholder).

Offshore Investment Strategies - Spanish Tax

It is more tax-efficient, these days, to own your Spanish property directly. With UK-sited assets, and not just property, similar look-through legislation is available, although it has not been used to the same dramatic effect as in Spain. That, sadly, might soon change. From 1 January 2001, there will be a new statutory offence in the UK of tax evasion. The cunning point is that it will be tried before magistrates. Now, magistrates are fine, upstanding people, but (to generalise unfairly) some of them might not have the same ability to enjoy listening to tax lawyers that high-court judges tend to display. After 1 January 2001, the risk is that your tax-efficient offshore structure will be taken before a magistrate, who will apply common sense to deciding whether or not it constitutes tax evasion.

Offshore Investment Strategies - A fine Line