Jersey Property Unit Trust

A unit trust does not have a separate legal status rather it is a legal arrangement whereby legal ownership of assets is vested in a trustee who holds these on trust for the benefit of unitholders. Under the relevant Jersey law, a unit trust must be constituted by a written instrument which sets out the terms on which the trustee holds the trust assets for the unitholders. Typically, a regulated trust company acts as trustee, but in certain cases, a special purpose trustee (“private trust company”) may fulfil such role. It is also common that a JPUT holding UK real estate has two trustees to facilitate “overreaching” under English property law.

Key advantages of using Jersey Property Unit Trusts

  • JPUTs are flexible property holding vehicles as there are no limitations on leverage or concentration restrictions
  • There are also no restrictions on the percentage or type or amount of units a unitholder can be issued with
  • In case of bank lending it is possible to create security over units in a JPUT and UK banks are familiar with JPUTs
  • There are no Jersey legal or regulatory limitations on the exercise of the trustee’s power to distribute trust assets to unitholders or the source from which such distributions may be made
  • Trust deed of the JPUT can be drafted in a way that gives unitholders certain rights of controls (reserved powers) over the decision making of the trustees

Key highlights

  • Flexible property holding vehicle
  • Potential UK tax advantages
  • Familiar to UK investors, lenders, legal advisors and property managers
  • Flexibility for unitholders (depending on the drafting of the trust deed)
  • No public register in Jersey of unit trusts or unit holders