Property Fund Representatives Call for More Action from Platforms on PAIFs

By Simon Morris On Tuesday, October 07 th, 2014 · no Comments · In , ,

Property fund representatives have called for more action from platforms on PAIFs, in light of higher demand for the product, something Simon Morris discusses this week.

Tax Incentivised Savings Association Meeting Calls for Support for PAIFs

Simon Morris is an independent London-based property adviser. Simon uses his expertise to advise UK property investment funds on how to maximise profit potential on their property portfolios, as well as guarantee long-term revenue streams.

Which is why he took note, when at the Tax Incentivised Savings Association meeting in September, property fund representatives called for more support from platforms’ for tax efficient Property Authorised investment Funds (PAIFs), as demand for the product soars.

Platform’s Ill-Equipped to Handle PAIFs

Known for their tax efficiency, PAIFs have become the desired structure for property portfolios. Consequently, many have switched from trusts or OIECs to the structure, and that shift is likely to continue, as hard won government support for it is likely to ensure the arrival of more PAIF friendly policies.

Therefore, property fund representatives have called for platforms’ to invest in systems which will facilitate them becoming more widely available. Whilst some platforms have adapted to meet the needs of PAIFs, others have cited administrative obstacles. One in particular that has been noted, is the inability of platform’s to handle the various income streams typical to PAIFs, which separate corporate holders from retail investors.

The Industry Needs to Make PAIFs Work

Calls for platforms’ to be more accommodating of PAIFs have beem made by asset managers since 2011, but government approval of the product, which has spurred demand, prompted louder calls than ever to be made at the meeting, according to Investment Week. One of those calls came from John Cartwright, chief executive of the Association of Real Estate investors:

Cartwright commented that “the industry, the Treasury, and HMRC have put in a lot of effort to make this work.” He went on to suggest that “we want to see it taken up, and we want to see it done properly. It is really down to the industry to deliver fully and comprehensively.”

PAIFs are the Future of the UK Property Market

In Simon Morris’ opinion, Cartwright makes a valid point. The popularity of PAIFs, along with the effort the government have put into making them work, mean that they are the future of property investment. Platforms’ need to realise this, to ensure that they can facilitate a strong property market for UK property investment funds going forward.

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