Property Fund Structure

edited June 2016 in Technical stuff

Hello!  A client of mine just raised the following issue and I wondered if anyone had come across a decent solution to this?

One issue I think we need to be careful regarding is which structure we consider for investors in respect of property funds depending on the tax treatment of the wrapper.  Rental income shouldn’t be taxed in ISA’s and Pension funds but in the past has often been I believe, by default, because of the structure of the funds that have been used.  Ideally the income would be paid out gross but if it is not then it needs to be able to be reclaimed and the ISA / Pension administrator needs to be aware that they will need to make a reclaim.

Comments

  • Hi. This is the reason many property funds are moving to the PAIF - Property Authorised Investment Fund - I believe. Some had gross paying share classes but needed the platforms to support it. It's a hot topic so do chat to the fund management group running one of the property funds in your portfolio.
    Chartered Financial Planner FPFS MCSI APP
    Head of Technical at EQ Investors

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  • parawhatparawhat Member
    Thought I'd tag onto this thread as similar issue.

    We're in the process of setting up a GIA within an offshore bond wrapper, but the platform concerned don't offer a 'gross' GIA so we're just trying to get to the bottom of the mechanics of how the tax on any net distributions (assuming there are any) are reclaimed.

    Am I right the only funds that are likely to pay distributions net are PAIFs post 06/04/2017?  What about REITs?
    Jonny (paraflex)
  • RalfosRalfos Member
    Dont all funds pay gross now, making gross GIAs redundant?
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