Qualifying Investor Fund - Irish Real Estate

Overview
The Qualifying Investor Fund (‘QIF’) is an Irish regulated fund structure and the vehicle of choice for private and institutional investors who are undertaking large scale investment in real estate or other alternative asset classes. The total asset value of Irish Qualifying Investor Funds currently exceeds €170 billion.

Permitted Investments
• Real estate in any jurisdiction;
• Development assets (without carrying on a business / trade);
• Debt instruments (loans, loan notes, debentures, etc.);
• Special Purpose Vehicle (‘SPV’) entities - to hold assets or enhanced tax efficiency;
• Joint Ventures (‘JV’) (provided QIF retains operating control).
 

Taxation Benefits
Investors who invest in Irish real estate assets either directly or via SPVs are subject to local income and capital gains taxes regardless of their tax resident status. QIFs mitigate these tax liabilities.
 

Taxation within QIF structure:
• Income and gains on directly held assets accumulate tax free
• QIF-owned SPVs remain taxable – but planning can mitigate
• Stamp duty on asset acquisitions – usual planning options apply
 

Taxation on exit from QIF structure:
• Non-resident investors are exempt from exit tax
• No stamp duty on purchase / redemption / transfer of QIF shares
 

Benefits
• Regulated structure
• Ability to raise funds from professional / institutional investors
• Recognised internationally as tax efficient for investors
• Flexible rules in terms of leverage, liquidity and concentration of assets
• Accounting and custody duties delegated to regulated independent third parties
 

Negatives
• Meeting the regulatory requirements (see ‘Regulatory Framework’ below) means additional costs. However, some offset may be achieved on internal costs / resources on the delegated accounting and custody activities.

QIF Structures & Features
Legal Format
Corporate entity (most common),
Unit Trust (certain merits) or
Limited Partnership
 

Choice of Fund Structures
Individual Fund or Umbrella Fund with Sub-Funds
 

UmbrellaFund with Sub-Funds
Flexible solution designed to:
• create specific portfolios of assets (residential, industrial, debt, etc.);
• attract capital from specific investor groups;
• meet specific investor needs (liquidity / portfolio configuration);
• hold assets for specific JVs;
• segregate liability between sub-funds (an Irish legal requirement).
 

Taxation
• Assets can be extracted from acquired SPVs within sub-fund;
• No stamp duty on asset transfer;
• Rents accrue tax free;
• Positions assets for re-sale
 

Disposals
• Sub-funds can be acquired by or structured for sale to specific buyers;
• Clean structure from a due diligence perspective;
• No stamp duty on share transfers;
• Ready-made regulated structure for a prospective buyer’s underlying investors
 

WARNING

The information provided above  is by way of general guidance only and is neither exhaustive nor definitive and is subject to change without notice. It is not a substitute for professional advice. Prospective investors are advised to make their own independent commercial assessment of the information contained herein and obtain independent professional advice (including inter alia legal, financial and tax advice) suitable to their own individual circumstances, before making an investment decision, and only make such decisions on the basis of their own objectives, experience and resources.You should consult your tax advisor about the rules that apply in your individual circumstances or alternatively please contact our Stragetic Partners in Financial & Taxation for professional advice.

Search - Use spaces to separate your keywords
Image

Location

  • 28-32 Upper Pembroke Street,
  • Dublin 2,
  • Ireland

Get in Contact

© 2017 Ireland World InvestmentsWeb Design by Webtrade.