UK real property

UK real property is often purchased by or for international private clients for personal use, investment or trading purposes. Prior to 6 April 2025, where individuals were non-UK resident or UK resident but non-UK domiciled (non-dom), it had been common practice to hold UK property indirectly through offshore structures for tax, probate and privacy reasons. To increase the tax take on UK property held through structures and to increase transparency, the government introduced a wide range of measures aimed at those holding UK real property indirectly.

On 6 April 2025, the remittance basis, which had been available to non-doms as a means of sheltering non-UK income and gains from UK taxation, was abolished. In addition, domicile as the connecting factor for inheritance tax (IHT) purposes was replaced by the concept of ‘long-term UK residence’. For more information on these events, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26.

This subtopic focuses mainly on the taxation of residential property acquired for personal use by or on behalf of non-resident

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OPG updates guidance on gift-giving rules for deputies and attorneys

The Office of the Public Guardian (OPG) has updated its guidance on the legal framework under the Mental Capacity Act 2005 governing when deputies and attorneys acting under a lasting power of attorney or an enduring power of attorney, or appointed by the Court of Protection, may give gifts on behalf of a person lacking capacity, and setting out the action it may take where authority is exceeded. The guidance states that gifts are permitted only in limited circumstances, typically on customary occasions to people connected to the person or to charities they supported, and must be reasonable, affordable and in the person’s best interests; any gift outside these statutory exceptions requires prior approval from the Court of Protection. Deputies and attorneys must first assess whether the person has capacity to decide, involve them as far as possible, and consider their wishes, feelings, financial position, current and future needs, care costs, tax implications and the impact on inheritance, while recognising that lasting powers of attorney, enduring powers of attorney or wills cannot extend statutory gifting powers. Property transfers, loans, transactions involving conflicts of interest and other substantial arrangements generally require court approval, with only limited de minimis exceptions. The OPG may investigate concerns, require repayment, seek removal or suspension, enforce security bonds or refer matters for criminal investigation where unauthorised gifts are made.

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