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Jersey Court varies title to jointly owned shares

Mike Bell, Trusts, Estates and Tax Partner at National Law firm Freeths LLP, has been advising a wealthy Cypriot family in relation to a significant potential Inheritance tax liability that resulted from UK situs residential and commercial property through a Jersey registered Company.

Sadly the patriarch of the family passed away in 2019 and having undertaken no inheritance tax (IHT) planning, his estate fell within the scope of the new IHT charges on residential property owned by an offshore company, leading to a significant potential tax liability.

Mike worked alongside Keith Dixon, Partner at offshore Law firm Carey Olsen, to vary the UK will, so as to appoint the entire estate to the surviving spouse, allowing a claim to be submitted for UK spousal exemption.

Mike and Keith were also successful in bringing an application before the Royal Court of Jersey to vary the disposition of the jointly owned shares in the Jersey Company, so that title those shares would then pass to the surviving spouse in accordance with the UK variation.

This type of application had never been attempted before and the successful outcome for the clients meant they were able to save a considerable sum of Inheritance Tax.

Mike Bell said “I was really proud to be part of such a milestone case but sadly this will become an all too common occurrence for non-UK clients owning UK residential property through an offshore company if they don’t take the necessary steps to protect their position”.

To read the full judgment click here.

If you hold property in the UK but are not domiciled there and would like further advice on how to protect your wealth please contact Mike Bell on 0207 440 5188 or mike.bell@freeths.co.uk.

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