With more than 40 years of experience in the industry Jersey is
a politically stable and tax neutral international finance centre.
Jersey features prominently when it comes to real estate investment
structuring for UK and European property. Jersey's proximity to
Europe, not only in relation to its time zone but also in relation
to its legal and conveyance system, combined with flexible
investment structuring and tax planning opportunities makes it the
primary choice for private and institutional real estate investors.
The range of structures is extensive, varying from a holding
company for individual or club deals to very private or public fund
structures created for sophisticated and experienced investors.
Why use Jersey?
1. Tax advantages
The most attractive feature of a Jersey real estate investment
solution is the tax savings on real estate investments into the UK.
Structuring through Jersey can assist with the mitigation of stamp
duty and stamp duty land tax, income tax, capital gains tax,
inheritance tax and value added tax (VAT). These taxes will apply
to UK-based but also foreign investors, and it is these overseas
investors that are likely to be unaware of the effect of these
taxes. The tax situation for foreign investors in Jersey is very
different: Non-resident investors into a Jersey investment
structure are not subject to local taxes, including bank interest.
Regardless of the type of vehicle used it will be exempt from
taxation in Jersey and there is no withholding tax on payment of
any dividends or interest made by the vehicle. In addition Jersey
has no capital gains tax, corporation tax, stamp duty, inheritance
tax or VAT. There is also generally no minimum capital requirement
for corporate vehicles, including collective investment vehicles,
and government incorporation costs are among the lowest in the
world. Regulatory fees for collective investment vehicles are
usually within £2,000 per annum, way below the fees imposed
in other jurisdictions. There is also no Taxe d'Abonnement (a
tax charge based on the value of assets).
2. Flexible legal framework
A common law jurisdiction, both real estate and corporate
transactions do not need to be notarised. Instead incorporations
are effected by mere registration through the Companies Registrar
and resolution of the board and the shareholders. Companies can be
established within 24 hours at a cost comparable or below other
leading international finance centres. The choice of investment
structures ranges from public and private companies with par value
or no par value shares, companies limited by guarantee to protected
cell and incorporated cell companies. Jersey also offers four
different types of Limited Partnership with or without its own
legal personality providing tax transparency for foreign
3. World class governance framework and regulations
Jersey is recognised as one of the leading international finance
centres, the most recent being:
Best International Finance Centre, International Fund &
Product Awards 2011; and
Jersey is of course on the OECD 'White List'.
The most popular investment structure for real estate investment
remains the Jersey Property Unit Trust and the Jersey Very Private
Fund which are both only subject to the simple Control of Borrowing
Order (COBO) regime that applies to all incorporations on the
Islands and for which consent will usually be granted within 5
business days. This scheme will allow up to 15 professional
investors, usually with a minimum investment of £250,000 or
Apart from the Unregulated Fund regime all other fund classes
provide for a fast track authorisation of a local investment
management company. All sophisticated or experienced investor fund
regimes available on the Island have no investment restrictions
imposed. Unregulated, Very Private Funds and closed ended Expert
Funds have no custodian requirement proving Jersey's
determination to remain one of the world's leading and most
flexible real estate and alternative investment funds
4. About Jersey
Jersey, at 45 square miles in size, is the largest of the
British Channel Islands. The Island is located 85 miles south of
mainland Britain and 14 miles from the coast of France. The
jurisdiction's main language is English, however many other
European languages are spoken and can be used for business
The time zone is the same as the UK. The business day begins
before Tokyo closes and continues well into New York trading time.
A close proximity to Europe but independence from the European
Union, Jersey offers both location and time zone benefits with
short flight connections to the UK and Europe.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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So, the pound's tanked, world stock markets are in turmoil, Scotland and Northern Ireland are considering whether to leave the United Kingdom so they can stay within the EU and the Prime Minister has announced his resignation.
This note provides a brief summary of the use of Jersey SPVs in structured finance transactions, outlines the principle legal and regulatory regime in Jersey governing such transactions and highlights some key considerations for these types of structures...
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