Why Purchase UK Real Estate through a Jersey Entity?


Are you considering buying property in the UK and to take advantage of the current rise in prices driven by low supply and extraordinary demand? A lot of sources are saying that the UK’s property market is in the midst of a bubble about to burst, potentially dragging property values down by between 15 and 20%. However, the Bank of England is doing everything in its power to buoy prices, as the health of the real estate market is a key indicator for Britain’s economic recovery.

If you do decide to purchase real estate in the UK, then you’ll want to buy the property in a cost effective manner; this is where a Jersey entity will help you. Quick and easy to set up, this entity will legally allow you to:

  • Avoid capital gains tax and stamp duty on the sale of your UK property down the road
  • Avoid the deduction of tax at source for UK rental income through the (Non-resident Landlord Scheme)
  • Close down the JPUT in a quick and straight forward manner
  • Retain 100% of the profits in the trust, making it possible to defer income tax on the JPUT’s profits

A UK listed REIT is commonly used to buy and manage residential and commercial property portfolios in the UK to avoid corporation tax on profits and gains, but a Jersey Property Unit Trust (JPUT) is cheaper and more flexible option. A UK REIT must be listed on a recognized stock exchange, whereas a JPUT can be listed on any stock exchange such as the London or Channel Islands Stock Exchange. Other huge advantages of a JPUT include:

  • 0% corporation tax ;
  • No limit on the use of debt to fund the JPUT, whereas UK REITS require an interest coverage ratio of at least 1.25;
  • No limit on the % interest of a stock unit holder or to the types of units in the portfolio;
  • No need to be a UK resident;
  • A JPUT portfolio can contain 1 or many properties; there is a minimum requirement of 3 for a UK REIT
  • Units can be transferred easily without incurring stamp duty tax in the UK or Jersey;
  • There is no limit to the value of property rental income in the portfolio. In the case of the UK REIT, 74% of the value must come from property rental, which seriously restricts use of the portfolio.

For more Information on JPUT and for help on setting up and support services, visit our company’s page on incorporating companies in Jersey: https://www.healyconsultants.com/jersey-company-registration/offshore-company/

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