Thousands of people who bought property abroad through a company will have a major tax threat lifted from next month.

Buying a holiday home using a corporate structure has been particularly popular in France to avoid stringent inheritance laws, but until recently it was feared the Revenue could levy a “benefit in kind” tax on the company.

The government lifted that threat last year and the changes are set to become law when the finance bill receives assent, probably next month.

This will give the green light for people who have bought through a company to reclaim thousands of pounds in taxes they have already paid.

It is not the only big tax change on the Continent. Wealth tax in Spain, which was between 0.2% and 1.2% of your assets even if you were non-resident, was scrapped in April.

1 Use a company in France . . .

The whole estate does not automatically pass to the spouse in France. The Napoleonic code determines who can inherit. It is compulsory to leave a specific proportion to your children in equal shares. If there are no children, parents can inherit if there is no will.

The rate of tax depends on your relationship with the person who died. More distant relatives pay up to 55%, while stepchildren and common-law spouses pay 60%. Husbands and wives are exempt following changes by President Sarkozy last year.

That’s why many people opt to buy through a société civile immobilière, particularly if they have offspring from a previous marriage whom they do not wish to be beneficiaries. Under an SCI, you become a director with company shares, which you can pass on as you wish.

However, until last year, you could have been subject to an annual tax in Britain as living in the property was classed as a benefit in kind. Individuals who have already paid the tax could be in line to receive payouts from the taxman from this summer.

2 . . . but not in Portugal

If you buy through an offshore company in Portugal, however, you’ll pay 8% transfer tax plus an annual tax of 1% to 2% of property value, compared with the standard rate of property purchase tax of 6%.