However, Russian buyers are in evidence outside London and between May and September 2006 Russians accounted for over 8% of Knight Frank sales of country properties above £2 million and just under 39% of properties above £5 million property valuer online Tax can impact negatively upon an otherwise sound investment. In this regard, the UK offers considerable advantages as it has relatively low tax rates compared with many other Office market demand – an indicator of employment growth – reflects this trend. The core inflation rate has remained low at 1.7% as of April 2005 while the overall inflation rate reached 2.4% owing to higher prices for gasoline, fuel oil, electricity and fresh produce.
There are various forms of offshore vehicles, otherwise referred to as non-resident companies, and offshore centres (the IMF listed no less than 64 in 2000) which in addition to tax benefits can offer other advantages such as simplified reporting requirements and anonymity. However, their level of regulation, supervision and compensation schemes vary so it is important to seek advice before investing in an offshore jurisdiction. In addition, offshore financial centres have been obliged to tighten their regulations in recent years and anti-avoidance legislation in the UK has reduced the tax benefits which UK domiciliary derive from offshore companies.
The fundamentals which underpin foreign buyer interest in UK residential property are unlikely to change significantly in the foreseeable future: stable economy, transparent legal system, tax-friendly regime for foreign buyers, large and dynamic residential property market offering good capital growth prospects, plus, in many cases, historic educational, cultural and business links. Language is also a key factor.
We foresee further growth in Russian buying activity, of the order of 10% per annum over the next two years, driven by the uncertainty surrounding the outcome of the approaching May 2008 Russian general election and the expansion of the HNWI population in Russia. With advantageous tax planning becoming widely available from many premier law firms and accountants, buying in the UK is becoming a very attractive option for many Russians.