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ARTICLE · 11 NOVEMBER 2008

Driving Investment Forward

Smith & Williamson
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PAIFs provide property businesses with an enhanced alternative to REITs. We compare the two regimes and highlight the improvements,

United KingdomReal Estate and Construction
Chris Lallemand
Chris Lallemand

PAIFs provide property businesses with an enhanced alternative to REITs. We compare the two regimes and highlight the improvements.

On 6 April 2008, PAIFs, an improved alternative to REITs for UK property businesses, were introduced. The PAIF regime is less restrictive than that of REITs, as the following comparisons indicate, and we expect them to be more popular than REITs once the UK property market improves.

  • A PAIF's tax-exempt property business must represent at least 60% of total assets and income, compared to a more restrictive 75% for a REIT.

  • PAIFs can invest in REITs within their tax exempt property business, including those which are listed foreign equivalents of a UK REIT. REITs are not allowed to include such investments in their exempt business.

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