Property funds (PAIFs and REITs)

Property funds come in different guises but, in each case, their primary purpose is to facilitate collective investment in real estate. Investment in real property is popular and often seen as lower risk than investing on the equity markets.

As with other fund-types, collective (as opposed to independent) investment in real estate offers many advantages. These include:

•
the ability to share investment risk—funds can afford to take greater investment risk because risk is spread more widely and, as a result, they can potentially access higher rewards
•
access to a larger and more diverse portfolio of property assets that an individual investor would be able to afford, and
•
professional investment management

Collective investment in real property has been widely encouraged. Developments in the UK's tax regime to ensure that tax does not hinder or dissuade collective investment in property funds have been rapid over the last few years. Central to the UK's regime has been the development of:

•
the UK real estate investment trust (REIT), and
•
the property authorised investment fund (PAIF)

REITs v PAIFs

There is a good deal of overlap

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Tax News

Court of Appeal dismisses HMRC’s appeal and confirms anti-abuse provision in UK-Ireland double tax treaty did not apply to deny UK withholding exemption (HMRC v Burlington Loan Management DAC)

Tax analysis: In Burlington Loan Management, the Court of Appeal dismissed HMRC’s appeal against the Upper Tribunal’s decision that the First-tier Tax...

Tax weekly highlights—23 April 2026

This week's edition of Tax weekly highlights includes: (1) the announcement of a 10% increase in the Electricity Generator Levy rate from 1 July 2026...

FTT finds that a reusable container is not necessarily a separate VAT supply (Clearwater Hampers Ltd v HMRC)

Tax analysis: In Clearwater Hampers, the First-tier Tax Tribunal (FTT) found that lidded wicker baskets were ancillary to the principal supply of the...

Supreme Court rules that expenditure was not ‘on the provision of plant’ (HMRC v Orsted West of Duddon Sands (UK) Limited and other)

Tax analysis: In Orsted West of Duddon Sands (UK) Limited and others, the Supreme Court allowed HMRC’s appeal, holding that capital allowances were...