The UK property market is renowned for its stability, strong rental demand, and international appeal. However, investing in UK real estate without a tax-efficient structure can result in unnecessary exposure to Stamp Duty Land Tax (SDLT), Capital Gains Tax (CGT), Income Tax, and Inheritance Tax (IHT). For investors – both domestic and international – establishing the right legal and financial structure is critical to maximising returns and preserving wealth.
At Fraser Bond, we work alongside leading tax advisers, lawyers, and private banks to help clients select and implement the most tax-efficient property structures tailored to their goals and profile.
UK property investors face a range of taxes that can significantly impact net returns if not planned for in advance:
Stamp Duty Land Tax (SDLT): Progressive rates with surcharges for additional homes and non-residents
Capital Gains Tax (CGT): Payable on the sale of residential or commercial property
Income Tax: Applied to rental income at rates up to 45% for individuals
Inheritance Tax (IHT): UK property is liable, even if held by non-UK domiciled individuals
Tax-efficient structuring helps reduce these liabilities legally while ensuring compliance with UK laws and evolving transparency requirements.
Purchasing property through a UK limited company is increasingly popular with buy-to-let investors, especially higher-rate taxpayers.
Advantages:
Corporation tax (currently 25%) on profits – often lower than higher-rate personal income tax
Full deduction of mortgage interest as a business expense
Easier to retain profits within the company for reinvestment
Succession planning flexibility through share transfer
Considerations:
Higher SDLT rates apply to companies
Annual compliance and account filing obligations
Dividend extraction incurs additional tax for UK-resident shareholders
Fraser Bond helps investors determine whether corporate ownership aligns with their investment horizon and income strategy.
An SPV is a limited company created solely for the purpose of owning property or a portfolio. SPVs are frequently used by professional landlords and joint venture partners.
Benefits:
Ring-fenced risk and liability
Easier to structure equity participation and external financing
Attractive to institutional and overseas investors
Trusts – such as discretionary or life interest trusts – are commonly used for succession planning, wealth preservation, and IHT mitigation.
Advantages:
Control asset distribution across generations
Potential IHT planning benefits
Privacy over direct ownership
Caution: UK rules on non-domiciled and offshore trusts have become stricter, and trusts holding UK residential property may still be subject to ATED and IHT. Expert legal advice is essential.
While once popular, offshore companies now offer limited tax advantages for UK residential property due to recent reforms, including:
Annual Tax on Enveloped Dwellings (ATED)
CGT on gains from April 2015 (residential) and April 2019 (commercial)
Inheritance Tax exposure despite offshore status
Use case: Still viable for commercial property, joint ventures, or global portfolios when structured correctly.
For investors preferring indirect exposure, Real Estate Investment Trusts (REITs) and regulated property funds offer:
Tax-exempt rental income at the fund level
Diversification across multiple assets
Liquidity (if publicly traded)
Ideal for those seeking tax efficiency without hands-on property management.
Structuring properties with appropriate debt can reduce taxable rental income and improve cash-on-cash returns – though interest relief is limited for individual landlords.
Splitting ownership between spouses or partners can help optimise income tax allowances and CGT exemptions.
Used in tandem with trust structures for effective IHT planning.
For investors building large portfolios, UK or offshore holding companies can streamline asset management and offer operational advantages.
Fraser Bond provides tailored advice and coordination for UK and overseas investors seeking compliant, tax-conscious property investment frameworks. Our services include:
Assessment of personal and corporate tax exposure
Introductions to vetted UK tax and legal specialists
Structuring advice for single or multi-asset portfolios
SPV setup, financing coordination, and compliance support
Post-acquisition strategy and asset management
Whether you're an individual buyer, family office, or corporate investor, we ensure your structure supports your strategy – not complicates it.
Tax-efficient structuring is no longer optional in UK property investment – it’s essential. With the right setup, investors can significantly enhance returns, simplify compliance, and ensure generational wealth continuity. Fraser Bond brings the knowledge, network, and practical experience to help you navigate the complex UK tax landscape and invest with confidence.
