Buy-to-let taxation: inheritance tax - part 5

In part five of our exclusive series on buy-to-let taxation, Liz Cuthbertson, private client partner at Mercer & Hole, explains how changes to inheritance tax mean that even overseas property owners will be hit

With effect from 6 April 2017, UK residential property will come within the charge of UK inheritance tax (IHT) no matter how it is held.

A non UK domiciled individual has often acquired UK residential property through a non UK registered and controlled company of which he is the ultimate beneficial owner. In doing so the owner is viewed as holding a non-UK asset (the shares), which represents excluded property and outside the scope of UK IHT while he is neither domiciled or deemed domiciled.

The non UK company shares may have been settled on to a trust if the settlor was becoming deemed domiciled for UK IHT purposes, thereby preserving excluded property status for the future.

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