Is your property held by a nominee? Some warnings.
Posted: Thu 12 Sep 2013 8:47 am
A friend of mine went to his advocate, who held my friend’s property as nominee, and asked him to transfer the property to him. The advocate refused saying that Cyprus law does not recognise nominee-ship and therefore the property belonged to the advocate.
Another young advocate friend, who says that he holds more than £50 million of ex-pats properties, reports that on any transfer of a “nominee” title (after deducting his usual generous fees) he must also deduct personal income tax, at the maximum rate, plus KDV on the WHOLE sale price. That is about 45% of the total sale price, even if you are selling at a loss. The reason, according to the advocate? The law does not recognise nominees and so the advocate is treated as the owner of the property, by the tax office. The deemed acquisition cost is nil, because the advocate has paid nothing, so that the whole sale price is taxable profit.
If there is no recognition of nomineeships, the best that can be said for the advocates is that they have been extremely negligent in their initial advice and should be liable to make good any losses. On the other hand, if nominees are recognised by law then what is happening is theft.
I wonder if there is any widespread abuse going on here.
The £eagle
Another young advocate friend, who says that he holds more than £50 million of ex-pats properties, reports that on any transfer of a “nominee” title (after deducting his usual generous fees) he must also deduct personal income tax, at the maximum rate, plus KDV on the WHOLE sale price. That is about 45% of the total sale price, even if you are selling at a loss. The reason, according to the advocate? The law does not recognise nominees and so the advocate is treated as the owner of the property, by the tax office. The deemed acquisition cost is nil, because the advocate has paid nothing, so that the whole sale price is taxable profit.
If there is no recognition of nomineeships, the best that can be said for the advocates is that they have been extremely negligent in their initial advice and should be liable to make good any losses. On the other hand, if nominees are recognised by law then what is happening is theft.
I wonder if there is any widespread abuse going on here.
The £eagle