A question I’m commonly asked is can I transfer ownership of my home or investment property/s to my tax free Offshore Company?
It can be done legally but you need to assume the worst case scenario (ie that that the local revenue/insolvency authorities or a litigation lawyer will investigate and possibly try and overturn the sale) and plan accordingly.
The key is commercial reality. The sale must be – and appear to be – “above board”.
1. The inquisitor might ask Where did the buyer come from? How did you meet the buyer? So the smart thing to do would be to list the property for sale with an agent that has international reach (ie one which regularly attracts non local real estate investors) and have the Offshore Company Director make a bid for it after a few others have made an offer.
2. The sale will need to be seen to be at fair market value (you can’t just sell the house to your Tax Haven Company for one Dollar/Euro!). And the contract of sale will need to be seen to be on normal/reasonable commercial terms.
3. You will not want to be seen to be doing or managing anything for the IBC. Hence the communications will need to be seen to be coming from the nil tax Offshore Company Director
4. Check local tax laws first. Often when a piece of real estate is sold the seller has to pay capital gains tax (“CGT”)
5. Check local investment laws next. There may be prohibitions or restrictions on the ability of non-local persons or companies to buy local real estate.
6. If you intend to keep living in the property don’t pay rent to the nil tax Offshore Company direct; have a property manager appointed to collect the rent and manage the residential tenancy.
Local laws can have an impact. Hence you should seek local legal and tax advice before committing to embark on such a program.