Unit trusts are a common and popular form of investment vehicle allowing investors to pool capital for the purposes of acquiring or holding real estate (whether in the UK or elsewhere). All underlying assets of a property unit trust are, as a matter of law, held by the trustee(s) on trust for the unitholders (who are the beneficial owners of those assets), and who hold units similar to shareholders holding shares in a company.
Where its purpose is to hold UK property, UK tax advice should be obtained to ensure that the structure is tax efficient whether by electing to be tax transparent or exempt in respect of UK capital gains, or otherwise.
Often structured as “Baker Trusts” which allow income to accrue directly to the unitholders, this briefing article compares and contrasts an Isle of Man property unit trust (“IPUT”) with a Jersey property unit trust (“JPUT”) (where both are, to a large extent, structured as private arrangements).
Please also refer to our briefing article entitled “Isle of Man Property Unit Trusts” for more details relating to IPUTs.
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The guidance in this note is for information purposes only and is not intended to be exhaustive. It is not intended to constitute legal or other professional advice, and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances. Cains only advises on the laws of the Isle of Man and accepts no responsibility for any errors, omissions or misleading statements or for any loss which may arise from reliance on the information in this note.