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Asset Holding Companies

Companies take the form of a legal person and as such they can own assets, this can be useful in a number of ways.

Put at it's simplest an individual who owns a property in the UK has UK resident assets which may be subject to UK inheritance or Capital Gains taxes. If the UK property is owned by a company the individual owns shares in a company and not a property and if the company is resident in a jurisdiction that does not have inheritance tax there should be no tax arising on their death or if they dispose of the shares there should be no Capital Gains taxes arising.

It follows from this that when moving residence to a new jurisdiction that taxes residents on resident assets it is sensible to have the assets owned outside of the jurisdiction. When moving residence to a jurisdiction that taxes residents on worldwide income it is sensible to endeavour to make that income the income of a company resident in a jurisdiction that does not tax company income.

Many civil law jurisdictions have problem in their domestic legislation in dealing with the concept of a trust and trustees and cannot easily differentiate between legal and beneficial ownership. They are all familiar with the concept of a company however and trustees are wise to consider owning assets in civil law jurisdictions through the medium of a trust.