Buying US property through an LLP

There is an advantage in US tax terms in using a traditional partnership structure or an LLC as foreign investors can use lower tax rates. If the US business is generating substantial profits the tax savings can be as much as 50% of a corporate rate. A foreign partnership or LLC structure also provides a vehicle for making US tax exempt gifts of the partnership's US real estate through transfers of the partnership interest itself since there is no US gift tax applicable to gifts of intangible interests. Therefore in terms of US taxes the preferred route to buy US properties would often be to ensure that any US properties are acquired by a foreign limited partnership. It would be prudent to ensure that the foreign partnership is regarded (under local, foreign law) as an entity separate from its partners and that the death of the partner is question does not terminate the partnership. If you are a UK resident looking to invest in the US, a good option would therefore be to use a UK LLP as it is considered a foreign limited partnership for US tax purposes. Note that the the main reason for holding in a foreign partnership as opposed to a US partnership is should an individual pass away, his interest in a non-US partnership is not considered a US asset for US Estate tax purposes. By using an LLP there is no tax at the entity level - the partners are taxed at regular individual rates (10% - 35%) on their distributable share of net operating income and the maximum capital gains rate is 20%. In terms of UK taxes, holding property via a Limited partnership would also benefit from pass through taxation. Therefore any rental income derived from the property would be taxed on you personally. Similarly any capital gains would also be taxed on you personally.