In recent years, the global real estate market has continued to heat up. From the UK and Australia to Japan, high-net-worth individuals across Asia have been actively allocating capital into cross-border residential properties, purpose-built student accommodation (PBSA), and income-generating commercial real estate.

However, behind the impressive investment figures lies a risk that is often poorly understood:

Cross-border property investments without the right ownership structure can trigger multiple tax regimes, resulting in significant inheritance tax, gift tax, and cross-border compliance costs.

‍

The Hidden “Layered Tax Risk” of Cross-Border Property Ownership

The key difference between overseas property investment and domestic home ownership is that cross-border assets are often subject to multiple countries’ tax systems simultaneously.

In popular education and property destinations such as the UK, Japan, and Australia, non-residents are commonly subject to inheritance tax or equivalent levies, with tax rates often reaching 30%–40%.

For example, if a Taiwanese parent purchases a property in the UK valued at NTD 100 million, an unexpected death could leave the next generation facing approximately NTD 40 million in UK inheritance tax, with inheritance procedures required to be completed in the UK before the asset can be transferred.

‍

Common Misconceptions Include:

1. Parents purchasing property for children may constitute an overseas gift, potentially triggering Taiwan gift tax (up to 20%).
2. Holding property in a child’s name creates implicit gifting risks and exposes the asset to very low levels of protection.
3. Future sale or rental income still requires compliance with multi-country tax filings and CRS information exchange obligations.
   

These risks become especially pronounced during succession planning, often turning assets originally intended to protect the family into a financial burden for the next generation.

‍

A Proven Structural Approach for Cross-Border Property Holding

In the thematic seminar “Structured Cash-Flow Assets: Cross-Border Property Allocation × Study-Abroad Property Planning,”

Dreamer Group and UK Lansha Group analyze real-life cases to demonstrate how high-net-worth families can hold multi-country real estate through effective structures.

The most stable and widely adopted approach is:

Trust → Offshore Top Holding Company → Local SPVs → Underlying Properties

‍

Benefits of Holding Offshore Assets Through a Trust

1. Risk Segmentation
2. Rental, legal, and operational risks are ring-fenced within the local legal entity, preventing contagion across the entire asset portfolio.
3. Financing Efficiency
4. Banks generally prefer lending to corporate entities secured by property. This allows refinancing, equity pledges, and exits to be handled in a more standardized and efficient manner.
5. Executable Governance
6. Trust deeds can clearly define the order of cash flows — expenses → taxes → principal and interest → distributions — as well as beneficiary conditions and guardianship mechanisms.

‍

Cross-Border Property as a Replicable Cash-Flow Engine

Cross-border real estate transforms personal use and investment into a repeatable cash-flow strategy:

• Start with owner-occupation to lock in living costs
• Transition to long-term leasing to build multi-currency income streams
• Use trusts, offshore holding structures, and local SPVs to layer risk control, enhance financing efficiency, and ensure consistent governance and compliance

Through this approach, families gain:

• Inflation protection and cycle diversification
• Flexibility in residency and tax domicile planning
• Clear, cross-generational distribution rules that can endure over time

‍