Residential Property Collective Investment Schemes

Investment in Residential Property is an allowable investment but only through genuine collective investment schemes such as REITS (Real Estate Investment Trusts) or PUTS (Property Unit Trusts). There are certain conditions which must be met before such investments are permitted through a SIPP. There is no tax on the scheme as long as it does not hold an interest that enables a member to occupy or use the property and the holding is no more than 10% of the value of the vehicle.

Residential Property Syndicates that meet the following conditions are NOT subject to tax:-

• The scheme owns no more than 10% of the vehicle
• The company has assets of at least £1 million
• If the last condition is not met, the company holds at least 3 residential properties
• In either case no asset is held which is taxable property, whose value exceeds 40% of the total value of assets held by the company
• No personal use of the residential property is permitted

Tax charges will apply if the above conditions are not met.

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Westerby Trustee Services Ltd is Authorised and Regulated by the Financial Services Authority Reg. No. 463533