Unauthorised unit trust meaning

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An offshore unauthorised property unit trust provides a means to hold UK real estate as an investment. These trusts are most often set up in the Channel Islands—typically Jersey or Guernsey—or in the Isle of Man, though they can also be constituted under the laws of another non-UK jurisdiction. This Practice Note describes such property unit trusts, wherever formed, as JPUTs (reflecting the prevalence of Jersey property unit trusts). For the purposes of this Practice Note, it is assumed that a JPUT holds UK real estate as an investment and not as trading stock. For an explanation of that distinction, see Practice Note: Dealing in property or property investment? Historically, JPUTs were favoured because UK real estate could be transferred into a JPUT without incurring stamp duty land tax (SDLT). That treatment arose under a specific exemption called ‘seeding relief’, which was withdrawn with effect from 22 March 2006, as noted in Practice Note...

Private Client England & Wales glossary A Abatement When, after settling the deceased’s funeral costs, debts and liabilities, the remaining estate cannot satisfy all legacies in full, the gifts are reduced accordingly, unless the Will shows a different intention. In a solvent estate, the order for reduction appears in Part II of Schedule 1 to the Administration of Estates Act 1925. Refer to Practice Note: Payment of legacies. Accruals basis Where income is taxed on an accruals basis, it is attributed to a given tax year by reference to the number of days within that year during which the activity giving rise to the liability accrued. See Practice Note: What is the basis of income tax?. Accumulation and maintenance (A&M) trust A form of non‑interest in possession trust designed to benefit children and young people up to 25, which received favourable inheritance tax treatment between 1975 and 2006. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. Accredited Legal Representative (ALR) ...

Jersey Property Unit Trusts (JPUTs) Many investors, notably those not resident in the UK, hold UK real estate investments through offshore unauthorised property unit trusts. These trusts are frequently formed in the Channel Islands (commonly Jersey or Guernsey) or the Isle of Man, though they can also be constituted under the laws of other non-UK jurisdictions. For the purposes of this Practice Note, such property unit trusts, wherever set up, are referred to as Jersey Property Unit Trusts (JPUTs), given the prevalence of Jersey structures. JPUTs gained traction historically because UK real estate could be transferred into a JPUT without triggering stamp duty land tax (SDLT). This relied on a specific exemption called ‘seeding relief’, which was abolished from 22 March 2006. Section 133 of the Finance Act 2016 introduced a different form of seeding relief, but it is restricted to authorised contractual schemes and property authorised investment funds, and does not apply to JPUTs. Owing to that historic relief, coupled with the continuing ability to transfer units in...