Corporate ownership of property

There can be substantial advantages in owning a property through a company, including:

• Mitigation of Inheritance Tax – For obvious reasons a property owned by a company will not be subject to inheritance tax, as a company has its own legal personality and is not affected by the demise of one or any of its shareholders.
• Succession  - As a company never dies, property owned by a company remains the property of the company.
• Discretion - When it comes to ownership of property discretion may also be required and can be achieved by corporate and trust ownership. A company continues to be the registered owner without the need for a new registration of title.
• Rules of Succession - Unlike English law, where a person is free to leave his property to whomever he wishes, many countries have enforced rules of succession, whereby a proportion of the deceased’s estate must go to spouse and children. By owning the property in a company that is registered in an appropriate jurisdiction that is not subject to succession rules one can avoid these legislative constraints. 
• Capital Gains Tax – In most countries capital gains tax is payable on the gain in value of a property when resale is effected. Liability to this tax may be avoided by transferring the shares in a jurisdiction where there is no capital gains tax rather than the property.
• Privacy, Confidentiality and Asset Protection - These are other advantages of Company ownership.

Corporate ownership of Property

The actual structure of corporate ownership will vary from jurisdiction to jurisdiction. In some jurisdictions such as Spain or Portugal offshore ownership of property is no longer attractive. However even in these jurisdictions there can be considerable perfectly legitimate reasons for corporate ownership. Where offshore ownership is problematic we often will propose onshore structures such as EU holding companies. The preferred structure varies on a case by case basis but quite typically could be as follows:

1. Beneficial Owner
2. Declaration of Trust
3. Shares held by our Trust Company
4. Offshore or (EU) Holding Company
5. Company from jurisdiction where property is located*.
6. Property

* Often not required

You will see from the illustration above that shares in the holding company would normally be held by our Trust Company's name with a declaration of Trust stating that we hold the shares on your behalf. This document is a private document that is not registered anywhere but provides you with the security that ultimately the property is yours, and that you can enforce that document by applying to court for recognition of ownership should, for whatever reason, you be uncomfortable with the trustees' behaviour.

On that subject, it is important that you realise that we are barristers and professionals, licensed by our Financial Services Commission (in essence the UK FSA), and have hundreds of substantial trusts and companies under management. Nicholas Cruz, LLB, TEP (the Senior Partner of Cruz & Co) is also a British Barrister and a member of the Clerksroom Chambers, and a Trust & Estate Practitioner. Serge Garcia, the M.D. of Acquarius Trust Company is a Chartered Banker, Chartered Secretary and Trust & Estate Practitioner. The other Directors are equally FSC approved and qualified Directors. See page About the Firm & the Company

Additionally, if you wish to settle the shares on trust at a later date in favour of your next of kin you can do so by establishing a more complex trust, though in the short term a simple declaration of trust, which is a document that says we hold the shares to your order, coupled with a letter of wishes which sets out your instructions in the event of your demise.

In summary, the main advantage of corporate ownership are:-

1. Confidentiality
2. Inheritance tax planning
3. Avoidance of rules of succession
4. If a willing buyer is prepared to purchase the shares of the holding company mitigation of capital gains and transfer taxes

COSTS
Costs of a company vary from jurisdiction to jurisdiction and this information can be provided upon request, typically they are approximately £2000 set up and annually £1000 per company.

In terms of time once again it varies from jurisdiction to jurisdiction. In offshore jurisdictions and Anglo-Saxon countries 3-5 days is usually enough time whilst on onshore jurisdiction particularly those governed by Napoleonic legal systems 15-20 days is more realistic.

If you are obtaining a mortgage for the purchase of your property you would need to speak immediately to your bank and explain to them that you intend to purchase the property in a Company name. Most of our clients purchase in Company names and banks are usually happy to proceed on this basis, subject to the execution of the appropriate guarantee. Nevertheless it is worth checking.

It is in our opinion extremely sensible to proceed in this manner, and our experience has always been that clients who do not, revert to us years later expressing regret.

Finally on the question of receipt of funds we should point out that corporate ownership of property will not make payment of cash to a bank any easier. The normal proof of funds and documentary evidence required would be applicable.

The upside of our trust company being licensed is that clients have the comfort that we are a reputable company vetted by our fiscal authorities and accountable. The downside as some may perceive it is that we require, in addition to fees on account (£3,000), compliance with all our know your client and due diligence procedures.

That includes:

1. Certified copy of passport of beneficial owner(s)
2. Reference from bank, accountant or a lawyer
3. Two utility bills showing proof of residence
4. Our client questionnaire/agreement completed and signed.