Jonathan Knight

I've made it known on another thread here that we have a house on a 5 house development where 4 of the houses are owned by Brits, 1 by a Turk.

Of the 4 Brits, 2 of us have the Tapus in our own name, 2 had to form company's to hold ownership which is crazy considering we are all on a 1000m sq plot but there you go. Clearly mine is less of a military risk than one of my neighbours.

Anyway, at the end of last year 3 of us decided to buy out the 4th Brit so we bought his company.

When I was out in March, 2 of my neighbours across the road told me they wanted to sell, even though they loved their places, because their properties are held in the name of Turks and they were worried that something bad might happen and they would lose their properties. I think this happened with another neighbour during the winter.

This set me thinking. As we own a company which holds one property already, why not reduce our costs by offering to hold other peoples properties?

There are a number of ways we could achieve this. Special classes of shares and other corporate instruments could be made up but by far the cheapest and easiest way would be to effectively 'buy' the other persons property and then lease it back to them on a 999 year lease. This effectively transfers ownership to the company whilst still allowing the owner to buy, sell, modify - do whatever they like with their property. And the nature of a 999 year lease means that although legally ownership has been transferred, in practise it hans't and will remain the 'owners' for 999 years. Can't imagine many of us would worry about who owns what in 999 years.

The articles of the company would not allow it to get into debt so the properties held by it would never be at risk or used as security against other loans. In fact, apart from the initial 'membership' fee to cover the legal transfer and a small annual fee to cover accountancy costs, the company would not trade in the traditional sense of a business. If you're paying £1200 a year in accountancy fees to trade your company, this vehicle could save a lot of that. The more memebers we get, the bigger the saving.

The adoption of a holding company therefore achieves the objective of placing ownership in a secure legal entity (controlled by Brits if that makes any difference) whilst allowing the right of ownership to remain with the individual.

At this stage this is a punt. If we decide to go ahead with this are there any people out there who would be interested in joining our arrangement? Clearly we would have to tie this up tight legally to ensure that people DO get the absolute peace of mind we would offer but if people could indicate whether they would be interested in principle, it is something we would take further.

Post here or PM me please.

Thanks

J

biggles

its hard for me to understand why anuone would buy a house in turkey that coild not be in their own name .i know someone who set a co up because they wanted to live in turgetreis .good luck to them ,but its not for me .our tapu is in our name [end of story] i would have thought there are enough risks buying abroad without having to mess around with ownership problems .

CrashTester

Im with Biggles, if I couldnt get the paperwork in my name to say I own it then I wouldnt buy in the first place.

While a 999 year lease will outstretch your own lifetime most people would still have family generations to pass it onto. The rich people in England didnt get rich by giving their property and money away, they ensure that what they have they keep for the future family and that is exactly what I would do if in the same situation.

That said, I can see that if you are in the situation where you had to set up a company to own the property, or register it in a turkish residents name, then your suggestion could be beneficial to some people. Good luck.

SamJones

Im with Biggles and Paul on this one......if you cant have it in your name whats the point in buying the property! Its not like buying a push-bike!!

Jonathan Knight

Guess you'll have to ask all those people who have their homes in the names of nominees or who have formed companies to hold the asset.

Fact is, there are a lot out there.

Not sure I go along with the ownership thing. 999 years is a long time. And there's always the possibility to build in renewal options.

In business, the kind of arrangement being proposed isn't unusual, I suggest.

J

immac

It is an interesting idea, but I wonder who has the tax liability? For example, if an owner sells, but does not pay taxes due, in whichever country, who picks that up?
Ian

fran1

I suppose the word TRUST has to be considered!. However the company shareholders could say that the person selling has to pay the tax up front into the company before any signing over is carried out.

turtle-webs

Surely if the company held all the properties then they are not owned by a single person and each property is partly owned therefore by every shareholder. If someone wanted to sell their property they would need approval by all of the board members before that sale could procede, ie anyone within the company could halt anyone elses sale for whatever reason they wanted - even as a result of petty arguments in the past - or worst case out of 'whats in it for me'. I've seen a few sales halted because of multiple names on a TAPU for these very reasons.

The company would also have to ensure that no single person had the ability to disolve of company assets otherwise a wayward MD could make themselves quite a profit.

Also consider the tax implications on the company for disposing of any assets, any taxes would be due from the company and not from individual disposals.

Jonathan Knight

Hold on guys, this is all getting a little complex considering that the idea is fundamentally very simple.

First of all, let's not forget that most property in the UK was leasehold until the 70's. All the things people are talking about here are part of the initial lease agreement and any company issues are resolved in the articles of association.

Essentially, holding a lease gives the owner absolute rights over the property and any tax, legal issues, transfers become the responsibility of the lease holder.

The ownership of the lease, and therefore the property, lies with the lease holder. The company has no involvement or resposibility for sales, transfers, profits or losses relating to the property and this is all part of the lease agreement.

The company simply holds the freehold of the property and to that end, the annual fee could be classed as a freehold charge.

I probably should have mentioned that one of us three is a chartered surveyor and so well experienced in matters of this nature.

As I've already said, the company is simply a legal vehicle for ensuring that the property does not have to be registered in a Turk's name with the usual appropriate legal charge or it avoids having to set up a single company, with its associated £1200 pa costs, to hold the asset.

The problem with a charge on the property if it's held in a third party name is that is that third party goes bust or is made bankrupt, the property can be seized by the receiver. You set up a company, there's an accoutants fee to be paid annually.

Worst case, we might need to provide a P&L for each house in the company but doing that is a lot cheaper 'en mass' than for a single property.

J