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.
The purpose of the fund is to acquire commercial real-estate properties and property rights in order to generate rental income, and also, as a result of an increase in their market value, to make a profit on their sale.
The Fund is aimed at investors who are interested in long-term investment in the property market.
Who are the target clients? - Owners of real estate, Developers
What is the project? Using CUITs to structure a rental business
How does the project work?
1. A real estate CUIT is created by adding real estate to the fund.
2. The real estate in the fund is rented out. Rent payments are added to the fund and are not subject to profit tax.
3. The income may be reinvested in order to purchase new assets, or it may be paid out, in full or in part, as dividends to the holders of units in the trust.
1. 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.
2. 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).
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.