Avoiding / Minimising CGT and IHT Liability on UK Property

[statman]

HI All,

I'm a British Citizen but have been living in HK for over 14 years, with no intention of moving back to the UK. I have 2 properties already in the UK, one which has no mortgage and one with just a small mortgage, and have agreed to purchase another property that is due to complete in Q3 2025.

As a father of 2 children, I'm now looking into my estate planning and want to try to minimise the IHT exposure for my kids and have been recommended to open up a Family Investment Company (FIC) and register the property that hasn't yet completed into the FIC. I've been quoted GBP5k for this, which I think sounds a little high, but will be worth it in the long run if it helps to avoid IHT. I'd really like to move my other 2 properties into the FIC (or similar investment vehicle) and have the following questions:

1. Is a FIC the right way to go? How about a HK based company? Would this be a better option?
2. Is there any way for me to be able to transfer my existing properties into a company without me having to pay what would be a fairly significant amount of CGT and stamp duty?

I receive decent rental income on the properties and would like to keep this, so gifting to the children isn't really an option. I am therefore looking for a method to propect the assets from CGT and IHT while maintaining access to the rental incomea and being able to dispose of the assets if required.

[statman]

I'm a British Citizen but have been living in HK for over 14 years, with no intention of moving back to the UK. My wife is not a UK citizen and has never lived there either. I have 2 properties already in the UK, one which has no mortgage and one with just a small mortgage, and have agreed to purchase another property that is due to complete in Q3 2025.

As a father of 2 children, I'm now looking into my estate planning and want to try to minimise the IHT exposure for my kids and have been recommended to open up a Family Investment Company (FIC) and register the property that hasn't yet completed into the FIC. I've been quoted GBP5k for this, which I think sounds a little high, but will be worth it in the long run if it helps to avoid IHT. I'd really like to move my other 2 properties into the FIC (or similar investment vehicle) and have the following questions:

1. Is a FIC the right way to go? How about a HK based company? Would this be a better option?
2. Is there any way for me to be able to transfer my existing properties into a company without me having to pay what would be a fairly significant amount of CGT and stamp duty?

I receive decent rental income on the properties and would like to keep this, so gifting to the children isn't really an option. I am therefore looking for a method to propect the assets from CGT and IHT while maintaining access to the rental incomea and being able to dispose of the assets if required.

[statman]

Just to add, I am married and my wife is not a UK citizen and has never lived there.

[muzzdang]

https://www.soteriatrusts.com/

Speak to these guys they seems good, and they have regular seminars for free

[ArrynField]

You and the FIV / Company etc are separate entities.

There's no way of transferring your existing properties without incurring CGT on the sale from your personal name and SDLT on the purchase by your FIV / Limited Company.

A UK Limited Company is the easiest to setup and has fulfilled the UK compliance when you setup the company.

You can use a HK company or company from another jurisdiction, but note the following:-

https://companieshouse.blog.gov.uk/2...-why-and-when/

https://www.gov.uk/guidance/annual-t...ngs-the-basics

HMRC have an online forums

https://community.hmrc.gov.uk/customerforums/

Always good to Speak to a Tax Advisor for latest news and requirements

[PLamHK]

Just to add, I am married and my wife is not a UK citizen and has never lived there.

The rules around domicile and IHT for spouses without the right of abode in the UK have very recently changed (probably in your wife's favour). Make sure whatever advice you get specifically reflects these recent changes.