This article does not constitute legal or tax advice. All decisions regarding property ownership structures should be made in consultation with qualified legal and tax advisors in each relevant jurisdiction.
Why Structure Matters
For ultra-high-net-worth individuals who own luxury properties across multiple countries, the structure through which those properties are held is one of the most consequential financial decisions they will make. The choice of ownership vehicle affects income tax, capital gains tax, inheritance and estate tax, asset protection, privacy, and administrative complexity. In an era of increasing international tax transparency, exchange of information agreements, and anti-avoidance legislation, getting the structure right has never been more important or more complex.
The fundamental question is deceptively simple: should a property be held in the owner's personal name, through a corporate entity, within a trust, or through some combination of these vehicles? The answer depends on a matrix of factors including the owner's tax residency, the location of the property, the owner's family structure and succession plans, and the regulatory environment in each relevant jurisdiction.
Personal Name Ownership
Holding property in one's personal name is the simplest structure and, in many cases, the most appropriate. There are no formation or maintenance costs, no regulatory filings beyond those required of any property owner, and the ownership is transparent. For many UHNW individuals, particularly those who are tax-resident in jurisdictions with favorable capital gains treatment, personal name ownership is entirely adequate.
The principal disadvantage of personal name ownership is inheritance tax exposure. In jurisdictions such as the United Kingdom (where inheritance tax is levied at 40 percent above a GBP 325,000 threshold on worldwide assets for UK-domiciled individuals), personal name ownership of high-value properties can create substantial estate tax liabilities. In the United States, the federal estate tax rate is 40 percent above the applicable exclusion amount (currently approximately $13 million per individual), and several states impose additional estate or inheritance taxes.
Personal name ownership also offers no asset protection in the event of litigation, divorce, or creditor claims. For UHNW individuals with significant liability exposure, this vulnerability can be unacceptable.
Corporate Structures
Holding property through a corporate entity has historically been one of the most popular structures for international UHNW investors. A company incorporated in a jurisdiction such as the British Virgin Islands (BVI), Jersey, Guernsey, or Luxembourg holds legal title to the property, while the beneficial owner holds shares in the company. This structure offers several potential advantages: shares in a company can be transferred without triggering property transfer taxes, the company provides a layer of privacy, and the structure can facilitate estate planning by allowing shares to pass to heirs without the need for probate in the property's jurisdiction.
However, the landscape has shifted dramatically in recent years. The UK's Annual Tax on Enveloped Dwellings (ATED), introduced in 2013 and expanded subsequently, imposes annual charges of up to GBP 287,000 per year on residential properties valued above GBP 500,000 held through corporate wrappers. The Stamp Duty Land Tax (SDLT) surcharge of 15 percent for corporate purchases of residential property above GBP 500,000 further discourages this approach in the UK.
In France, properties held through foreign corporate structures are subject to an annual 3 percent tax on the fair market value unless the holding entity's jurisdiction has an appropriate tax treaty and the entity discloses its shareholders to the French tax authorities. Spain, Italy, and several other European jurisdictions have implemented similar anti-avoidance measures.
Trust Structures
Trusts remain one of the most powerful and flexible tools for UHNW property ownership, particularly for multi-generational wealth preservation and estate planning. A trust separates legal ownership (held by the trustee) from beneficial enjoyment (by the beneficiaries), and when properly structured, can provide significant inheritance tax advantages, asset protection, and succession planning benefits.
In the UK context, placing property into a trust can remove the asset from the settlor's taxable estate for inheritance tax purposes, provided the settlor survives for at least seven years after the transfer (the seven-year rule for potentially exempt transfers). Trusts are also used extensively in common law jurisdictions to hold property for the benefit of minor children or future generations, ensuring that wealth passes according to the settlor's wishes rather than the default rules of intestacy.
Offshore trusts established in jurisdictions such as Jersey, Guernsey, the Cayman Islands, or New Zealand are commonly used by internationally mobile UHNW families. These jurisdictions offer favorable trust legislation, no local taxation on trust assets, and sophisticated professional trustee services.
However, trusts are subject to increasing scrutiny and reporting requirements. The OECD Common Reporting Standard (CRS) requires financial institutions to report information about trust accounts to tax authorities. The EU Anti-Money Laundering Directives have imposed beneficial ownership registration requirements on trusts with connections to EU member states. And many jurisdictions now require trusts to maintain registers of beneficial ownership that can be accessed by tax authorities and, in some cases, the public.
Foundations and Other Vehicles
Private foundations, particularly those established under Liechtenstein, Dutch, or Panamanian law, serve a similar function to trusts in civil law jurisdictions where the trust concept is not natively recognized. Foundations can hold property, provide governance structures for family wealth, and offer succession planning benefits.
Limited partnerships and limited liability companies (LLCs) are widely used in the United States for property ownership, offering pass-through tax treatment, liability protection, and flexibility in estate planning through the transfer of partnership or membership interests.
The Compliance Imperative
The single most important principle in modern UHNW property structuring is compliance. The era of opaque offshore structures designed primarily to avoid tax has definitively ended. The combination of CRS, the Pandora Papers revelations, country-by-country reporting, and the global political focus on tax fairness means that any structure must be capable of withstanding full transparency and scrutiny.
The leading private banks and wealth management institutions, including UBS, JP Morgan, Julius Baer, Lombard Odier, Pictet, Bessemer Trust, Stonehage Fleming, and Northern Trust, all maintain dedicated structuring advisory teams that work alongside external legal and tax counsel to design and implement ownership structures that are both efficient and fully compliant.
For UHNW investors, the goal is not to avoid tax but to optimize it: to ensure that no more tax is paid than is legally required, that the structure is sustainable across generations, and that the administrative burden is proportionate to the benefits achieved. This requires ongoing attention, as tax laws and international agreements evolve continuously.
