Guides · Holding
Where to set up the holding company: the United Kingdom or the United States?
For a Latin American investor grouping international shareholdings, the United Kingdom usually comes out ahead for four specific reasons: it withholds nothing on dividends to any country, it has the widest treaty network in the world, it incorporates online the same day and it is run remotely with a single director. The United States withholds 30% on dividends where there is no treaty, and several countries in the region have none. That said, if the holding company is going to hold mostly British property, two of the British tax advantages stop applying, and that is the part almost no commercial material mentions.
Before comparing: these are two decisions, not one
The commonest mistake is treating the holding company and the vehicle that owns the property as if they were the same thing. They are not, and they are decided on different criteria:
- The holding vehicle settles how a particular asset is bought and run: financing, liability, several owners coming in. We cover it in the buying structures guide.
- The holding company settles how shareholdings across several companies or jurisdictions are grouped, how dividends move up, and what happens when a subsidiary is sold.
An investor with a single flat in Birmingham does not need a holding company. One with three assets in two countries and different partners in each probably does. This guide is about the second question.
The comparison
| Item | United Kingdom | United States |
|---|---|---|
| Incorporation | Online, usually the same day | State-level and on paper, days to weeks, sometimes with physical presence |
| Administration | One director is enough; fully remote management | Registered agent and annual meetings |
| Corporation tax | 19% up to £50,000 and 25% above £250,000, with marginal relief in between | 21% federal plus state tax |
| Withholding on dividends paid abroad | 0% to any country | 30% with no treaty |
| Dividends received from subsidiaries | Exempt in most cases | Partial deduction on foreign holdings; domestic ones taxable |
| Selling subsidiaries | Substantial shareholding exemption, where the conditions are met | Taxable gain, with no equivalent exemption |
| Annual compliance | One return, nine months after year end | Quarterly payments and multiple state filings |
| Treaty network | The widest in the world | Broad, but with gaps in Latin America |
Checked as at September 2026. Rates and thresholds change.
The treaty gap, which is the point underneath
The figure that weighs most is not the tax rate: it is the treaty network. And there is a pattern here worth seeing whole, because it repeats across two different taxes and bears specifically on Latin American capital.
The United States is not more expensive for everyone. It is more expensive for those without a treaty, and much of Latin America has none.
- Dividends. The United States withholds 30% on dividends paid abroad where there is no double taxation treaty to reduce it. Mexico and Chile do have an income treaty with the United States —the Chilean one took effect in December 2023— so for those two countries the rate is reduced. Colombia, Brazil, Peru and Argentina do not, and there the full 30% applies.
- Succession. The same pattern, and harsher: the United States has estate tax treaties with sixteen countries and not one is in Latin America. A non-resident with no treaty has a sixty thousand dollar exemption on their US-situs assets. We cover it in the jurisdictions guide.
The United Kingdom, by contrast, withholds nothing on dividends paid abroad regardless of the destination country, treaty or no treaty. For a Colombian or Brazilian investor that difference alone can decide the structure.
And now the part commercial material leaves out
The two most-cited British tax advantages —the substantial shareholding exemption and the non-resident's exemption on selling shares— have an exception that bears precisely on property holding companies.
The UK property-rich company
Since 6 April 2019, a non-resident selling shares in a UK property-rich company is subject to UK tax on the gain. A company counts as UK property-rich when 75% or more of the gross value of its assets is UK land or property, and the rule bites where the seller holds at least a 25% interest, counting connected persons' holdings in the previous two years as well.
Put another way: anyone selling shares in a holding company that owns mostly British property cannot take the "no tax for the non-resident" promise for granted. It is a claim still circulating in commercial material, and it has been out of date since 2019.
That said, there are two thresholds, not one, and neither is met by default: 75% of gross asset value and a 25% interest. The rule exists and must be known; whether it reaches a particular case also has to be checked, and that depends on how the shareholding is composed and on what else the company holds. That is engagement analysis, not guide analysis.
The substantial shareholding exemption
The exemption on selling subsidiaries requires conditions on percentage, holding period and the nature of the trade to be met. It is not automatic, and how it fits a subsidiary whose activity is owning property needs specific analysis. Publishing it as a general, unconditional advantage is what makes a reader with an adviser discard the whole thing.
When the United Kingdom genuinely wins
- When the holding company groups shareholdings across several jurisdictions and the aim is for dividends to move up to the ultimate owner without withholding.
- When the owner lives in a country with no treaty with the United States, where the 30% withholding is real rather than theoretical.
- When speed and cost of administration matter: same-day incorporation, one director, remote management, one return a year.
- When the group has or will have activity beyond British property, which is where the British exemptions deliver their value without the property exception.
When it does not pay off
- A single British asset. A holding company sitting above the ownership vehicle adds compliance cost without solving anything the vehicle does not already solve.
- When the jurisdiction of residence rules. If your country taxes worldwide income, has controlled foreign company rules or counts foreign shareholdings towards wealth tax, the British analysis can be subordinate to the one at home. It is the variable that most often reverses the conclusion.
- When the structure has no substance. A holding company with no real activity, no decisions taken where it is incorporated and no business reason is fragile before any tax authority, your own included.
Related questions
Sources
- HM Revenue & Customs — CG73934: NRCG and indirect disposals, the UK property richness test, applying to disposals from 06.04.2019.
- GOV.UK — Corporation Tax rates and reliefs.
- GOV.UK — Register a company online and annual filing obligations.
- Internal Revenue Service — Withholding on payments of US source income to foreign persons and tax treaty tables.
What Acacias does with this
We structure client by client and coordinate with authorised tax advisers in both jurisdictions involved, the British one and yours. This guide exists so the conversation starts with the framework clear, not to replace it: the right answer depends on where you live, how many assets there will be and what the group will actually do.
General information drawn from the official sources listed at the end. The taxation of international corporate structures is complex and case-specific; this guide is an overview and deliberately leaves out detail. It is not tax, legal or financial advice. Detailed advice is essential before taking any decision. Acacias Capital Ltd is not authorised or regulated by the FCA.