Liquidating real

Although it is simple, is it the best structure from a tax perspective? Most sophisticated real estate sellers already hold their real estate through separate entities such as limited liability companies, partnerships, real estate investment trusts and corporations.Generally, each entity holds one property, thereby isolating liabilities associated with that property to prevent them from jeopardizing the success of another property.

Typically, a company director will have gone through many months of stressful negotiations with HMRC for taxes owed and the bank to try and raise additional funding.This ownership structure often provides the parties with an excellent opportunity for tax savings if they are willing and able to structure the transaction as a sale of the entity owning the real property, rather than a sale of the real property.The tax savings, while usually to the benefit of the seller, can benefit the buyer as well if the seller is willing to make an adjustment to the purchase price.Part II of this article briefly summarizes the basic US federal income tax principles that apply to offshore investments in US real property.Part III of this article outlines common transaction structures utilized by a non-US investor in US real property and briefly summarizes the US federal income tax consequences of each investment applicable to such investor.

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