Putting an Eye on IPUTs: An Attractive Proposition for Investment Managers

Written by Isle of Man Wealth & Funds Services Association member Suntera Global

The Isle of Man Property Unit Trust, commonly referred to as the IPUT, is a tax-efficient and flexible vehicle that enables investors to hold UK real estate with transparency and ease.

With property held by trustees on behalf of unitholders, the IPUT aligns perfectly with global regulatory standards while delivering real benefits.

Here are three compelling reasons why the IPUT is a standout choice for investment managers targeting UK property investments.

Speedy Setup and Cost-Effective

IPUTs are typically structured as exempt schemes, which means that they do not require formal approval from the Isle of Man Financial Services Authority (IOMFSA), under Schedule 3 of the Isle of Man Collective Schemes Act 2008. This not only reduces setup time and costs but also allows managers to quickly capitalise on emerging investment opportunities.

Legal Alignment

Built on a legal and regulatory framework that closely aligns with those in England and Wales, the IPUT offers familiarity that allows seamless integration with existing UK property holding structures. This alignment not only simplifies legal interpretation and compliance but also enhances investor confidence by ensuring consistency with familiar UK standards.

Tax Efficiency and Streamlined Operations

The IPUT is particularly attractive due to its tax-transparent structure. When established as a ‘Baker Trust’, the income generated by the trust asset (e.g. rental income) flows directly to the unit holders. This approach ensures that income is taxed at unit holder or entity level and is particularly beneficial for exempt investors who can receive income gross of tax and benefit from capital gains tax transparency elections.

Other key tax benefits include:

• Optimised VAT Handling: Registration typically takes five working days, and the IPUT can be grouped with overseas companies for VAT efficiency.
• Stamp Duty Savings: Property can be transferred by selling IPUT units, with no stamp duty charged on unit transfers in the Isle of Man.

Enhance IPUT integrity with Manx expertise

On the Isle of Man, our dedicated fund administrators are here to support you throughout the full lifecycle of your fund. We deliver a comprehensive suite of services, including:

• Trustee and administration services
• Company secretarial and investor services
• Governance and compliance frameworks

With a proactive, responsive approach and senior expertise, we deliver the operational excellence that allows you to focus on building your long-term fund strategy.