Friday, August 18, 2017

Avoiding taxes

Wealthy foreigners are prepared to shell out as much as £25,000 a week renting luxury homes in London without bothering to set foot inside before opening their wallets. High-end estate agents report that overseas demand for super-prime London homes is so strong that the global super-rich are agreeing to rent properties after only viewing them on FaceTime or WhatsApp. Iin the past wealthy tenants would have sent their personal assistants or hired relocation experts to go to viewings on their behalf, but are now utilising technological advances instead.

Rich overseas clients are increasingly choosing to rent properties rather than buy in order to save on the government’s increased stamp duty on homes owned via by offshore companies. “Those who considered buying can now rent for four or more years for the equivalent cost of the stamp duty on a comparable home, leaving them in a good position to buy if and when the time is right.” 

Trevor Abrahmsohn, the owner of Glentree Estates, a top-end north London agency, who has sold dozens of multimillion-pound homes on and around The Bishops Avenue in Hampstead to billionaires from across the world, said his agency had secured a series of “mega deal” rentals recently and let properties worth £40,000 a week in aggregate. “The properties these people want could be valued at £30m or more,” he said. “The stamp duty on that would be near £5m – that’s the equivalent of five years’ rent even at £20,000 a week. And you save on all the maintenance costs, as they become the owner’s responsibility. The number of high-end rentals has been gradually increasing for the past two years, but now they’re quite a regular event.”

 Renting also lets wealthy individuals maintain their privacy, as the government prepares to force the declaration of the identity of the true owner of all properties. At the last count, 200 wealthy foreigners are choosing to pay £218,200 a year in tax rather than declare which of London’s £20m-plus mega-mansions they own. The number of homes let for more than £5,000 a week – or £156,000 a year – in the first six months of 2017 increased 21% compared with the first half of 2016.

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