British With Dual Nationality
Subject is British born, worked and eventually emigrated to Australia. Now holds dual nationality and both British and Australian passports.
British parent wishes to gift a rental property (in the UK) which will continue to be let and generate income (less than the existing UK personal allowance) for the subject currently living in Australia. In this regard, UK tax needs to be dealt with:
- Does the subject automatically have a right to a personal allowance? I have found no consistent view on this;
- Does the subject automatically have a right to the annual CGT exemption?
The subject is currently retired in Australia and has a low income - just below “the threshold” - thus qualifying them for subsidised healthcare, transport etc which, in an ageing population and uncertain economic environment turns out to be worth more than a little extra income - which would take them above the threshold and expose them to the full and rising costs of living.
It was suggested that the rental property be gifted to a UK limited company in which the subject was the only shareholder (and possibly the only director). In this way no dividends would be paid and thus the subject/shareholder would derive no income. Any profits would accrue in the company (on which UK corporation tax would be paid) until a time when the subject could benefit from the payment of a dividend or the company was wound-up and its assets (sale proceeds of the property & accrued net income) distributed to the shareholder.
Is this a viable strategy? Is there a better one (ideally not involving trusts or any “high maintenance”/aggressive strategies)?
Any advice would be most welcome.
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