L&GI Secures Approval For PAIF Conversion.
13 May 2014
Legal & General Investments confirms that unit holders of the £1.2 billion* L&G UK Property Trust voted overwhelmingly in favour of converting the fund into a Property Authorised Investment Fund (PAIF) structure, at an Extraordinary General Meeting on 9 May 2014. The conversion will take place on 27 May 2014, resulting in more tax-efficient income for many investors in the fund.
Unlike many real estate funds the structure does not pay corporation tax. Instead, PAIFs keeps track of three different income streams: rental, interest and dividend income.
The conversion of the L&G UK Property Trust into a PAIF means distributions from rental income and interest can be paid out gross to qualifying investors, benefiting those investing through an ISA or within a pension in particular. It also involves the creation of a feeder fund within a unit trust, allowing all unit holders who are ineligible or unable to invest in a PAIF to continue to remain in the fund. After conversion, the PAIF will be called the Legal & General UK Property Fund.
The L&G UK Property Trust invests in a diversified portfolio of UK commercial property assets, and aims to provide an attractive income yield and capital growth. The lead manager on the fund is Michael Barrie, who is supported by fund manager Matt Jarvis as well as a highly experienced real estate research team. Legal & General Property manages £11.9 billion of assets in property*.
Simon Pistell, Managing Director of Legal & General Investments commented:
“At a time when the outlook for commercial property is brightening, greater tax efficiency will help ensure that UK real estate remains attractive for long-term investors.”
Notes to editors
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
The value of investments and any income taken may fall as well as rise, and investors may get back less than they invest. The value of property is generally a matter of valuer’s opinion rather than fact.
The tax efficiency of PAIFs is based on current rules. The current tax situation may not be maintained.
The benefit of the tax treatment depends on individual circumstances.
The Legal & General Group, established in 1836, is one of the UK’s leading financial services companies. As at 31 December 2013, we were responsible for investing £452 billion worldwide on behalf of investors, policyholders and shareholders. We also have over 7.9 million customers in the UK for our life assurance, pensions, investments and general insurance plans.
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Legal & General (Portfolio Management Services) Limited.
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