Property holding structures—direct tax treatment of a Jersey property unit trust (JPUT)
Property holding structures—direct tax treatment of a Jersey property unit trust (JPUT)

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Property holding structures—direct tax treatment of a Jersey property unit trust (JPUT)
  • Tax on income
  • Deductibility of interest expenditure
  • Capital allowances
  • Deductibility of tax from rental income—non-resident landlords scheme
  • Controlled foreign company rules
  • CGT treatment of JPUT and its unitholders
  • CGT treatment of a JPUT prior to 6 April 2019
  • CGT treatment of a JPUT on and after 6 April 2019
  • CGT treatment of unitholders
  • More...

STOP PRESS relating to property rich collective investment vehicles and certain investors: HMRC consulted until 16 December 2020 on regulations that amend provisions in Finance Act 2019 relating to collective investment vehicles (CIVs). The regulations provide for non-UK resident life assurance companies and non-UK resident, non-UK property rich CIVs, with less than a 10% interest in UK property rich CIVs (wherever resident), to be treated as not holding a substantial indirect interest in the CIV (subject to certain conditions). The aim is to remove disproportionate administrative burdens for such investors. This change has retrospective effect from 6 April 2019. The regulations also contain provisions to correct minor errors in the legislation without changing the way the relevant rules operate. These provisions have effect from 24 March 2021.

UK real estate can be held as an investment through an offshore unauthorised property unit trust. Such unit trusts are commonly established in one of the Channel Islands (typically, Jersey or Guernsey) or the Isle of Man, but may be established under the law of another non-UK jurisdiction. This Practice Note refers to such property unit trusts, wherever established, as JPUTs (since Jersey property unit trusts are common).

It is assumed for the purposes of this Practice Note that UK real estate is held by a JPUT as an investment rather than an item of trading stock. For details

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