It is common for U.S. individuals investing in commercial real estate in the U.K. to adopt a two-tier structure through which U.K. real estate is owned. It is also common to hold each property through a separate special purpose vehicle (“S.P.V.”) formed in the U.K. In their article, George Mitchel, a Partner in Forsters L.L.P, London, Heather Corben, a Partner in Forsters L.L.P, London, and Amy Barton, a Senior Associate in Forsters L.L.P, London, explain how this relatively simple structure (i) enables a U.S. resident investor to eliminate two levels of tax on distributed profits, (ii) creates foreign tax credit limitation in the U.S. allowing a U.S. resident investor to obtain an immediate foreign tax credit for U.K. taxes as gains are harvested at the time shares of a U.K. limited company are sold, and (iii) allows the estate of a U.S.-resident investor to obtain benefits under the U.K.-U.S. Estate Tax Treaty limiting death duties to taxes imposed in the U.S. They also caution about a particular risk if a structure is headed by a U.S. grantor trust having one or more U.K. residents as beneficiaries.