Malaysian investors looking to buy property in the UK are turning to Collas Crill for both conveyancing and advice on using the Channel Islands to structure their investment.
Offshore law firm Collas Crill, which reaches Malaysian property investors through its Singapore office, has seen increasing interest, particularly in the London residential property market.
Michael Morris, Collas Crill’s UK property expert, said: “Many Asian investors are following in the footsteps of a trio of Malaysian giants – SP Setia Bhd, Sime Darby Bhd and the Employees Provident Fund (EPF) which have together invested in the redevelopment of the iconic Battersea Power Station in London.
“The Channel Islands were the location of choice for the Malaysian trio when they were structuring their investment in Battersea and remain the location of choice for many investors when choosing how to invest and hold property.
“Guernsey and Jersey both have a strong reputation for efficient asset holding structures, particularly given their ties with the banking and business community in London.”.
Collas Crill is seeing Malaysian middle class aiming to generate income return, rather than high net worth individuals seeking capital growth, investing in the London property market from their base in Asia. Malaysian buyers are most likely to buy into regeneration zones outside prime London. Their average budget of around £800,000 means that they are typically looking at small properties near central London or larger properties in the booming east London postcodes.
The recent changes in residential property taxes in the UK are a real consideration for those with a modest sum to invest, and understanding changes is as essential as knowing the market itself. This is where Collas Crill partner Michael Morris has been in demand to advise Asian, particularly Malaysian, investors.
Michael said that Malaysian investors need to take specialist advice both at home and in the UK to ensure that the relevant property taxes are being taken into consideration when deciding how best to structure their purchase.
“Historically, many Asian buyers have purchased property by using an overseas company, often incorporated in the Caribbean or the Channel Islands. The reason for doing so was that this limited the exposure to UK inheritance tax, which is chargeable on the UK estate of individuals, whether they are residents or not,” he said.
“The new taxes introduced by the UK government have made that decision more complex. If you buy UK residential property in an offshore company, and there remain many good reasons to do so, you may face additional taxes, including Stamp Duty Land Tax (SDLT), Annual Tax on Enveloped Dwellings (ATED), Capital Gains Tax (CGT) and Inheritance Tax (IHT),” he added.
Category: Finance & Business