AREF welcomes UK’s proposed stamp duty land tax relief
John Cartwright (pictured), Chief Executive of the Association of Real Estate Funds (AREF), comments on the UK government’s objective to introduce stamp duty land tax relief in 2016…
We welcome the government’s intention to introduce a stamp duty land tax (SDLT) relief for seeding investment – a much needed removal of double taxation that can help retail investors diversify their portfolio over the long term, particularly as we move further into a defined contribution world in which individuals will need to take responsibility for their retirement savings. Real Estate can be a key asset class to help people build up their pension pot.
However the deferral of the measure until 2016 will prevent a number of funds being launched in the UK in the meantime and could represent a lost opportunity for the industry and the government. We would therefore urge bringing forward the measures to the Finance Bill 2015, that will enable a number of fund promoters to put property into UK funds and not have to turn to offshore fund centres.
Under the current SDLT rules when a PAIF (Property Authorised Investment Fund) is launched by transferring existing property portfolios as seed assets, it incurs a 4% tax. This has deterred the industry from setting up new PAIFs and therefore investors are not getting the full benefit and range of the product.
