Jersey Finance has welcomed the release of the Technical Note, and associated clauses within the draft Finance (No. 3) Bill, setting out the provisions for non-resident collective investment vehicles (CIVs) investing in UK property.
These measures form part of the UK’s wider policy to extend the capital gains tax (CGT) regime to non-residents holding UK property. They are the result of a period of collaborative consultation between the policy team at HM Revenue & Customs, HM Treasury and a range of industry stakeholders, including Jersey Finance and its members.
Central to these provisions for CIVs is the creation of two new elective regimes, a transparency election and an exemption election. These are designed to address industry concerns, by providing a means of preventing CGT being imposed at multiple levels within investment structures or indirectly imposed on tax-exempt investors (such as pension funds) who hold UK property through CIVs.
The new elections take into account the wide range of investment vehicles which are used for investing in UK property, including transparent vehicles such as JPUTs.
We believe that these elections will help to achieve a level playing field in which investors remain free to choose to structure their UK property holdings through Jersey, taking advantage of our Island’s expertise, proportionate regulatory framework and flexible vehicles.
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