(1888PressRelease)
April 17, 2007 - This is especially so in light of recent media reports of pension plan problems and a national debate on whether the social welfare system is going to be able to meet the needs of an increasingly ageing population.
According to one property market consultant, recent years have seen a "massive explosion" in the levels of both interest and activity of UK buyers in the foreign property market. A spokesman for Frank Knight claims that there are now up to a million Britons that are active in the market. And he opined that "the volume of properties that are advertised and marketed in the UK" are proof that the market is thriving.
One piece of recent good news for anyone that is thinking of buying a property abroad was a government announcement that company directors are no longer to be charged benefit-in-kind tax for owning a property abroad that they have purchased through their company.
Previously, UK directors could buy a foreign property - often through a shell company - and then issue shares in their firm. This would allow them to avoid any inheritance tax in both the foreign or domestic country.
However, the British government charged directors who were taking advantage of this loophole a benefit-in-kind tax on those shares, in order to make for some of the income lost through not being able to charge inheritance tax.
That tax will no longer be charged from 2008, which may benefit investors in the overseas property market (provided they first set up a front company, a relatively easy undertaking) and may especially interest those that are retired or approaching retirement age. According to Frank Knight, recent years have seen a "big trend" towards retirees buying property abroad.
"There are normally two reasons why people do it," said a spokesman. "One is pure investment: they're looking to buy somewhere where you'll outperform the UK investment market". Alternatively, he said, a significant proportion are simply "buying for lifestyle - either to use in the interim as a holiday home and then with an eye to retirement, or potential downsizing in the future."
