PAIFing the way

KEY POINTS

• Reasons for lack of enthusiasm for authorised investment property funds
• Tax treatment of a PAIF is similar to that of a REIT
• Restrictions on what can constitute a PAIF
• No entry charge applies to PAIFs

It was hoped that the introduction of the UK real estate investment trusts (REITs) regime in 2007 would change the UK property investment landscape by removing tax inefficiencies for property investors.

REITs have made a relatively quiet start. Although a number of listed property companies have converted to UK REITs and there has been one property company IPO no REITs have been launched by property fund managers.

The introduction of the property authorised investment funds (PAIFs) regime in April this year which removes tax inefficiencies for investors in authorised property funds has drawn far less attention than REITs...