| | | | | | | Overseas Property Investment | | | | | Byrne & McCall continue to identify investment opportunities for their clients in the UK and across the EU. Typically, these would be high spec residential and commercial developments with projected completing dates of 12 to 18 months thus enabling the investor to avail of capital appreciation over the completion period. In conjunction with our property partners who have offices in the UK, Latvia, Estonia and Spain, we can offer our clients a one stop shop, identifying properties, sourcing finance and letting of properties. We organise regular trips for our clients to these countries in order to identify potential properties. |
| |
| | | When investing in foreign property, the key issues that must be addressed are:
(a) How much cash will the investment put in your pocket. In other words, will it produce a positive return, and if so, how much – in comparison with other potential investments? Are you buying an asset that will pay for itself, or are you buying into something that will drain your cash flow for years to come?
(b) What is the potential for, and expected, level of capital appreciation? Over 5 years? 10 years? Much of this is down to ‘gut feeling’ on the part of the investor. One person may look to the past and see a disused docklands area of a city. Another might look to the future and see a bustling waterfront with cafés, shops, etc.
(c) The investment horizon of the owner – is it a short term ‘bet’ or a long term investment – one that will be passed on to the investor’s children, in tact?
(d) The legal form in which the ownership of the property should be held, i.e.:
(i) directly by an individual,
(ii) in the joint names of the individual and his or her spouse, and/or his or her children,
(iii) by a company owned or controlled by the individual,
(iv) by an offshore company owned or controlled by the individual,
(v) by an offshore trust to the trustees of which the individual has passed funds to acquire the property on behalf of named beneficiaries (for example, his or her children).
(e) The effect of the tax treaty, if any, between Ireland and the country in which the foreign property is located, for example, Ireland has a tax treaty with Spain which covers income tax, corporation tax and capital gains tax. The tax treaty with France does not explicitly cover capital gains tax, whereas the treaty with Spain does.
(f) The current and intended residence status of the owner mentioned in (a). In other words, will the person acquiring the property be acquiring it as a non-resident of the country in which the property is located? In the case of an individual leaving Ireland, does he intend to put down roots in the new country? If he remains ordinarily resident in Ireland he may be caught for tax in both Ireland and the new country for several years.
(g) Tax avoidance legislation dealing with transfer of assets abroad and rules of residence.
Each of these can have different consequences. Tax saving in one country may lead to tax exposure in the other. The purpose of the exercise is to examine options and make an informed decision – rather than uninformed guesswork – which can have a very significant long term cost once the deal is signed. | | | | ( Reproduced with kind permission of Alan Moore, Tax World Limited: www.taxworld.ie ) | | |  | If you would like to receive more information on overseas property investment,
please complete our email contact form here. |
|
|
|
|
| | | | | | | | | | | | | | | |
|
|
