A punitive “double tax” for property authorised investment funds has been scrapped by the chancellor, paving the way for more investment in the sector.
PAIFs will no longer be hit with an additional 4% tax when transferring properties to new funds as “seed assets”.
The legislation will come into force in 2016 under measures introduced in this week’s Autumn Statement. This could prompt fund managers to launch new vehicles as PAIFs, said John Forbes, property funds consultant and former partner at PwC.
“This is a positive move, but fund managers are in for a long wait until the ruling is introduced,” he said.
