Posted on 04 July 2022
UK Retains Appeal for Real Estate Funds Post-Brexit
Patrick McCullagh and Matthew Molton recently sat down with PERE for its Fund Domiciles & Regulations Report to explore how the UK is reforming its regulatory framework to adapt to Brexit and improve its appeal as a jurisdiction for alternative investments.
Is the UK the new Luxembourg for real estate fund managers looking to deploy capital in Europe? Given recent moves by the UK government to compete with Luxembourg and Ireland, the comparison may be fair. “In the recent past, if you were a manager looking to attract EU investors, there was a widespread perception that you had to go down the Luxembourg route,” explains Patrick.
Increasingly, that’s not the only answer, as the UK has made it easier and less expensive to run European structures post-Brexit. Initiatives include improved tax treatment for alternative investment fund structures, enhancements to REIT regimes, and the introduction of both the Long Term Asset Fund (LTAF) — an open-ended fund structure that makes private real estate investment more accessible to high-net-worth individuals — and Qualify Asset Holding Companies (QAHCs), which do away with certain holding company tax advantages. These efforts and more are making the UK, which is already a leading fund domicile, even more appealing regardless of asset location.
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