According to a notice published on the OECD's web site, in 2014 Cyprus and 43 other jurisdictions (including Malta, the Netherlands, Great Britain, the Isle of Man and the islands of Guernsey and Jersey) confirmed that the first automatic transfer of tax information, in accordance with the standards proposed by the OECD, would take place in September 2017. It is expected that this group is likely to increase in number as the above countries are joined by other countries willing to support the automatic exchange of tax information.
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Cyprus: automatic exchange of tax data, new property tax rates
Real estate unit investment trusts are currently the most common and most popular type of closed-end unit investment trust. The successful development of these instruments is largely due to the possibilities they offer. They have all the advantages of other unit investment trusts and make it possible to carry out practically any property construction projects. There is a very wide range of real estate unit investment trusts – above all, they are an instrument for carrying out construction and development projects and, for a wide range of companies, serve as a means to manage assets.
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Construction of multi-storey buildings
Who are the target clients? - Developers
What is the project? - Construction of residential property under a shared participation agreement (Federal Law 214-FZ)
How does the project work?
The CUIT is created by paying in money.
The fund acquires from the developer the rights for the future residential property at an early stage of the construction under a shared participation agreement.
When the building commissioning is completed, the flats may be sold to end purchasers and the proceeds of the sale may be reinvested in order to purchase new assets, or they may be paid out, in full or in part, as dividends to the holders of units in the trust.
Advantages:
1. Tax Optimization
Income from UITs is not subject to profit tax (income tax). It may therefore be reinvested into new projects without the need to pay any tax at the interim stage (tax-free reinvestment).
2. Asset Protection
A unit investment trust is not a legal entity. The management of UITs, as multiple-asset objects, is carried out and supervised by organizations which are licensed to do so by the Bank of Russia. Information about the owners of units in a UIT is not disclosed to anyone. Furthermore, assets held by a unit investment trust cannot be seized to satisfy debts of the management company or unit owners. All these characteristics provide a high level of protection against hostile takeover of the assets.
3. Increased Liquidity
A unit in a unit investment trust is an uncertificated security which serves as evidence of ownership of the property that is included in the UIT. Rights to such units are recorded in a register maintained by a special organization licensed to do so by the Bank of Russia. The unit has all the characteristics of a security, including the ability to use it in transactions. This makes it significantly easier to assign a business, or withdraw from it, simply by transferring the rights to the units in the unit investment trust.