Russians based all around the world have long used Guernsey
structures to acquire and hold international residential and
commercial property. The Island has a huge amount of experience in
providing real estate acquisition structures for individuals and
Feedback tells us that individuals and corporates are looking to
place assets in reputable jurisdictions that are well regulated,
conveniently located and have service providers with relevant
experience and knowledge. European, particularly London, real
estate is currently attractive to international investors,
Situated between the UK and France, Guernsey has a locational
advantage and this explains why anyone exploring real estate
prospects in the UK, the European continent or beyond would
consider Guernsey's real estate holding structures –
which primarily utilise companies, limited partnerships and unit
trusts – the Guernsey Property Unit Trust (GPUT) – with
private trusts and limited liability partnerships also available.
It is also possible to utilise a Guernsey incorporated Real Estate
Investment Trust (REIT).
The pertinent things to consider
The issue of direct ownership of real estate assets, wherever
they might be located, exposes many foreign clients to potential
tax issues, for example, property taxes, stamp duty and inheritance
tax. Therefore, it is strongly recommended that anyone considering
acquiring real estate particularly in foreign jurisdictions gives
serious consideration to robust acquisition and holding
arrangements, to avoid unforeseen tax implications.
International clients need to be able to place assets in
structures and jurisdictions that are legally robust and tax
efficient. Guernsey's financial services industry prides itself
on offering a full range of top tier services to meet requirements
of clients all around the world. Many jurisdictions may well offer
tax-efficiency but should be carefully considered to ensure they
can withstand legal scrutiny, for example, creditors calling on a
trust. Guernsey trust and corporate structures are legally robust
and hence have been used for over 50 years. In addition, the
quality of service providers should be considered at length, and
not just cost alone. Guernsey's finance industry, which has
been established for over 50 years, has international banks as well
as wealth managers available to meet debt and financing needs
associated with purchasing real estate.
Real estate investment funds
With more than 20 years of experience in property funds,
Guernsey is a well-known domicile for investment funds established
to acquire significant real estate portfolios. Private and limited
partner investors are familiar with investing in Guernsey property
A key advantage is Guernsey's flexible company law in
particular with regard to distributions, which is based on a
straightforward solvency test. Furthermore, Guernsey incorporated
property structures can be used to speedily access international
stock exchanges, notably the London Stock Exchange (LSE).
Examples include Raven Russia (Russian warehousing) and F&C
Commercial Property Trust Limited (UK commercial property).
Other notable fund managers which have established Guernsey real
estate funds include: AXA, CBRE, ING Real Estate, M&G,
Schroders and Starwood. Guernsey has also seen investment fund
structures being utilised for financing and refinancing
arrangements connected with property and distressed debt on real
For example, US real estate group Starwood Capital established
the Guernsey-domiciled closed-ended investment fund, Starwood
European Real Estate Finance Limited with the purpose to originate,
execute and service a diversified portfolio of commercial real
estate debt investments in liquid markets (office, retail,
logistics, light industrial, hospitality and residential) in the UK
and Continental Europe.
Starwood European Real Estate
LSE listing date: December 2012
Market cap: £751 million (August 2014)
Guernsey trust and corporate structures are widely used to
acquire property and there are a number of benefits of doing so,
including preserving confidentiality and reducing exposure to tax.
A wealth of expertise has been accumulated over many years and
Guernsey providers also have long standing relationships with
surveyors, developers, estate agents, interior designers and
lawyers to assist clients in sourcing and developing
An original Russian version of this article was first
published inKommersant, October 2014.
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