Buying Prime London Property Through a Company or Trust: Key Considerations
Introduction
For ultra-high-net-worth families, acquiring property in London is rarely a straightforward process. Beyond selecting the right home, there are important questions about how ownership should be structured. Should the property be acquired in personal name? Would it be preferable to hold it through a company? Or is a trust structure the most effective solution for succession and privacy?
The right choice has implications not just for tax, but also for confidentiality, inheritance planning, and long-term wealth preservation. Each option carries benefits and drawbacks, and understanding them at the outset is essential.
Why Structure Matters
Ownership structures are more than a technicality. They determine:
Tax exposure — both at purchase and annually.
Privacy — the degree to which ownership is visible on the public Land Registry.
Succession planning — how easily the asset can pass between generations.
Flexibility — the ability to adapt should personal or family circumstances change.
For UHNW families, the property is not just a home; it is often a multi-generational asset, a store of wealth, and in some cases, a diplomatic or corporate base. The ownership structure must be aligned with these broader objectives.
Buying in a Personal Name
The simplest form of ownership is to buy the property directly, in the name of the individual.
Advantages:
Straightforward process, with minimal ongoing compliance requirements.
SDLT liability limited to the individual, avoiding ATED.
Clear control and use of the property.
Disadvantages:
Ownership is publicly visible on the Land Registry.
May expose the individual to UK inheritance tax (40% on the value above the nil-rate band).
For non-UK domiciled buyers, personal ownership can have significant long-term tax implications.
For many domestic buyers, personal ownership is appropriate. For international families, it is rarely the optimal long-term solution.
Buying Through a Company
Corporate ownership has traditionally been a popular route for overseas buyers, particularly where privacy was paramount.
Advantages:
Provides a degree of confidentiality; while the company is listed on the Land Registry, beneficial ownership may be shielded.
May allow greater flexibility in transferring ownership by selling shares in the company rather than the property itself.
Disadvantages:
Triggers the Annual Tax on Enveloped Dwellings (ATED) for properties valued over £500,000.
SDLT is higher on corporate purchases, especially where the property is worth over £500,000 (15% flat rate may apply in some circumstances).
Requires annual corporate reporting and compliance.
For many buyers, the financial burden of ATED and the higher SDLT outweigh the privacy benefits of corporate ownership.
Using a Trust Structure
Trusts are often used by UHNW families as part of broader estate planning. Property may be held in a trust for the benefit of future generations, with trustees overseeing management.
Advantages:
Provides a vehicle for succession planning, ensuring property passes according to family wishes.
Can protect assets against certain claims or risks.
Potential to reduce inheritance tax exposure, depending on domicile and residency status.
Disadvantages:
Complex to establish, with significant legal and tax advice required.
May trigger higher SDLT or ongoing charges depending on the structure.
Trusts are increasingly subject to transparency rules, reducing historic confidentiality advantages.
For international families, trusts remain valuable tools — but they must be structured carefully, and always with specialist advice.
How Non-Residents Are Treated
Non-resident buyers face additional considerations:
Non-Resident SDLT Surcharge: 2% added to standard SDLT rates.
Inheritance Tax Exposure: UK property is subject to inheritance tax regardless of the owner’s domicile.
Disclosure Requirements: International transparency regimes (such as the Trust Registration Service) mean structures must be reported.
The choice of structure must therefore be aligned with both UK rules and the wider tax position of the family internationally.
Strategic Questions to Ask Before Purchase
When advising clients, we encourage them to consider:
Is privacy or tax efficiency the higher priority?
Is the property intended as a family home, an investment, or a legacy asset?
Should the property be easily transferable between family members or held in perpetuity?
How does the UK asset sit alongside global holdings, trusts, or foundations?
What is the likely political and tax landscape in the UK over the next decade?
These questions help shape not just the purchase decision, but the structuring that underpins it.
Case Study: A Family Office Acquisition in Belgravia
A European family office sought to acquire a £15m Belgravia townhouse. Initial advice from their local advisers suggested a corporate structure for privacy. However, UK counsel highlighted the exposure to ATED (£244,750 per annum at that valuation) and the punitive 15% SDLT rate for corporate ownership.
By reconfiguring the purchase through a trust structure aligned with family succession planning, SDLT was reduced significantly, ATED was avoided, and long-term inheritance objectives were met. The decision preserved privacy, but not at the expense of unnecessary annual costs.
The Role of a Buying Agent in Structuring
While structuring decisions sit with tax and legal advisers, the buying agent plays a central role:
Coordinating with advisers before offers are made.
Ensuring deal timelines allow for structuring to be finalised.
Negotiating terms that align with the chosen structure (e.g., flexibility on completion date).
Managing confidentiality throughout the process.
Without this alignment, buyers risk entering negotiations in a suboptimal position, potentially costing hundreds of thousands of pounds.
Conclusion
Buying prime property in London is about more than finding the right house. For UHNW families, it is about securing an asset that aligns with privacy, tax efficiency, and long-term legacy. Whether purchased personally, through a company, or via a trust, the decision on ownership structure shapes not only the financial outcome but the future stewardship of the property.
At Lucie Hirst Private Clients, we ensure that structuring decisions are addressed from the outset, working seamlessly alongside trusted lawyers, accountants, and family advisers. In doing so, we give our clients the confidence that their acquisition is not just well-judged today, but resilient for the generations ahead.