Yes.
Last modified 27 Feb 2026
The term permanent establishment is not a generically used term in the UK (of which England and Wales form a part), other than for double-tax treaty purposes where the concept is relevant to the tax rights of the state in which a permanent establishment has been created.
Generally, for tax reasons, investors who are not resident in the UK would seek to avoid creating a permanent establishment in the UK.
The use of a UK limited partnership for inward property investment is not normally seen as the creation of a permanent establishment for UK tax purposes.
The basic cost of setting up a limited partnership is often minimal. There are, however, additional costs such as taking legal and tax advice on whether this is an appropriate vehicle and structure and substantial costs will be incurred in drafting and negotiating (where necessary) a suitable constitution for the investment vehicle which regulates the rights and obligations of the investors and as between the investors and the sponsor or investment manager.
A UK limited partnership can be established simply by lodging the relevant details with the UK Companies Registry. However, the establishment of an investment vehicle with negotiated terms which will be suited to investors and the raising of funding from investors for that investment fund may take considerable time and the relationship and rights and obligations between the partners is usually governed by a limited partnership agreement.
A UK limited partnership is generally considered a tax transparent vehicle with taxation applied at the level of the limited partners, to profits / losses that are received by said limited partners from the limited partnership.
UK limited companies are not tax-efficient vehicles for non-UK real estate investors since they are not tax transparent. One notable exception is the UK Real Estate Investment Trust, which is a company typically listed on a recognised stock exchange.
Where a permanent establishment takes the form of a UK incorporated company, UK company law applies, under the Companies Act 2006 and associated implementing regulations. This provides a comprehensive code governing the rights and obligations of the company itself, its directors and shareholders.
Certain aspects of company law relating to registration and accounts apply to non-UK incorporated companies with branches in the UK.
Where a LLP is used, this will be governed largely by the members' agreement, which regulates the rights and obligations of the LLP itself (which is a corporate entity in its own right with separate legal personality) and its members. The LLP will often be managed by a management committee of members who report to the membership at large. Although it is a corporate entity, an LLP does not have a share capital and is generally tax transparent for UK tax purposes. The Limited Liability Partnership Act 2000 and associated implementing regulations (the LLPA), provide the statutory framework within which LLPs operate, including rules on insolvency and measures for the protection of creditors. The LLPA contains many analogous provisions to those that apply to limited companies with certain modifications.
The Financial Services and Markets Act 2000 (FSMA) applies to all "regulated activities" carried on in the UK and can apply to a UK incorporated company, an LLP and a company incorporated outside the UK with a UK branch. Regulated activities include so far as relevant to inward UK property investment:
Though direct real estate investment is generally not governed by FSMA, where property is owned through any kind of corporate or collective investment scheme vehicle, there will be FSMA implications and specialist advice should be taken.
Last modified 27 Feb 2026
Because a limited company incorporated in the UK (of which England and Wales form a part) is not tax transparent for UK tax purposes, it is unusual for non-UK investors investing in UK property to do so via a company incorporated in the UK, unless the investment is to be made through a UK Real Estate Investment Trust or the only investors are UK companies which pay corporation tax on their profits in the UK (in which case a corporate joint venture is quite common). There is, however, no legal objection to investors acquiring shares in a UK incorporated company which owns land. There are some exceptions to this, for example, where individuals are seeking to invest in a land trading or development company if there are tax advantages to the individual investing in the unquoted company, including where the non-listed company has its shares traded on the Alternative Investment Market.
A further exception is a UK Real Estate Investment Trust. The use of non-corporate vehicles to hold UK real estate for investment purposes is far more common in the UK, particularly where the investment vehicle is designed to facilitate common investment in a portfolio of properties by investors of different types or even in a single large property.
The main types of vehicle available to investors are:
Last modified 27 Feb 2026
A limited partnership consists of (usually) a single general partner and one or more limited partners. A limited partner who invests in such a partnership will be liable for the debts and obligations of the partnership only to the extent of their nominal capital contributions and the relationship between the partners is usually governed by a private limited partnership agreement. Limited partners are not permitted to take part in the management of the partnership or its investments. The general partner (which is normally an SPV (special purpose vehicle) controlled by the sponsor of the partnership which manages the partnership's property investments) has unlimited liability for the debts and obligations of the partnership. The general partner does have a right of recourse or indemnity against the commitments of the limited partners as investors to meet partnership obligations unless otherwise agreed.
An English limited partnership does not have separate legal personality, meaning that a limited partnership cannot enter into contracts and hold assets in its own name. Instead, a limited partnership will contract and hold assets through the agency of its general partner.
A limited liability partnership (LLP) is a corporate entity comprised of members who have limited liability. As in a partnership and limited partnership the relationship between the members is normally set out in a private members' agreement. An LLP which carries on a business is taxed like a partnership so that any income and gains of the members are taxed as if they were partners in a general partnership. The LLP is not a separate taxable entity except on its winding up. An LLP is sometimes used as a property investment vehicle, but tends not to be suitable for investment by tax exempt investors (such as pension schemes) for whom the vehicle is not tax transparent.
The liability of members is limited to the amount which they have agreed to contribute to the LLP. Certain creditor protection provisions apply which allow distributions made to members within the two years prior to the onset of the insolvency of the LLP to be recaptured by a liquidator if the members knew, or ought reasonably to have foreseen, that insolvency would occur.
An LLP is more commonly used as a vehicle for the manager of an investment fund due to various tax advantages which are available to the members of the LLP.
Property holding companies (nominee companies) are established and enter into a trust deed. The nominee companies hold legal title to the property on trust for a syndicate of participating investors. Each investor owns a defined share in the property. After the property is sold, the companies are brought to an end to ensure that no residual liabilities arise subsequently. This is also known as a co-ownership trust and is used in circumstances where a group of investors want to take strategic and other important investment decisions but also have tax transparency and minimum regulation.
It is possible to structure an investor syndicate trust so that it is not a collective investment scheme for regulatory purposes, with the result that its operation does not require the appointment of an FCA authorised person. Normally this type of structure is used for co-ownership of a single property investment rather than for a property portfolio.
Property unit trusts are schemes which pool investors' funds into a single fund which invests in property. Individual investors then buy units in the fund. Units are bought or sold through a fund manager and the value of individual units varies in line with the overall value of the fund. Unit trusts divide into those that are authorised by the FCA, either for retail or institutional investor distribution (the requirements which apply to the terms of the unit trust are stricter for retail investors), and those that are not authorised.
Generally, property unit trusts are set up on a closed-ended basis, ie investors do not have a right of regular redemption of their units. It is possible to have an open-ended Property Unit Trust (where investors have a regular right of redemption of their units by reference to the underlying net asset value of the assets of the trust). These tend to be the largest property funds and require substantial portfolios and additional liquid property-related assets and cash/near cash to be maintained to ensure that there is sufficient liquidity to meet investor demand. Gating provisions will commonly apply so as to permit the manager of the Unit Trust to defer redemptions to ensure fairness between outgoing and remaining investors and to avoid forced sales.
It is worth noting that offshore property unit trusts such as Jersey property unit trusts (JPUTs) are popular structures for holding UK based real estate. The advantage of using JPUTs is that they can often avoid UK SDLT on asset transfers and (if appropriately structured) avoid UK SDLT on the transfer of units.
With some exceptions for UK corporate investors, including banks in connection with joint ventures, UK-incorporated companies are not widely used for UK property investment due to the absence of tax transparency for either income or capital gains tax. Note the existence of the ability for a limited company to opt into the Qualified Asset Holding Company (QAHC) regime that brings with it associated tax benefits should the limited company meet certain conditions. QAHC status however brings little benefit to limited companies that invest in solely UK real estate.
This is a company formed and registered under the Companies Act 2006 of the UK and has a separate legal personality. It must meet certain minimal capital requirements. One specific form of a tax-efficient public limited company is a real estate investment trust (REIT) (see below).
Qualifying companies and groups of companies have been able to join the UK REIT regime since 1 January 2007. Part of the underlying political motivation for introducing REITs was an attempt to stop investment in UK property continuing to flow offshore. A REIT allows a corporate entity that buys, develops, manages and sells real property to invest (tax efficiently) in a professionally managed portfolio held for long-term benefit. Broadly, REITs benefit from an exemption from tax on the income and capital gains from their property rental business and distributions of income profits and capital are treated as UK property income in the hands of shareholders. A 20% withholding tax is imposed on such distributions (subject to exceptions).
To qualify as a REIT, the company must satisfy a number of conditions and apply to HMRC (the tax authority) for approval as a REIT. Two of those conditions are that the company is not a ‘close company’ (or is simply a close company by virtue of one of the participators being an institutional investor) and that its letting business comprises at least three properties. As a result, ownership of REITs must be widely held and will only be a suitable choice of property holding vehicle if there are a number of investors investing in multiple properties.
Property companies which are tax resident offshore may not join the REIT regime unless they move onshore. The REIT regime is also not as attractive for investments in overseas property. Although REITS may develop property, the REIT regime is not appropriate for developers.
PAIFs are open-ended investment companies that are collective investment schemes authorised and regulated under the terms of FSMA. PAIFs were introduced to attract a wider range of property investors and lessen the tendency for exempt investors (such as charities and registered pension funds) to invest in property through tax-neutral offshore structures such as Jersey property unit trusts.
To qualify as a PAIF, the company must be an open ended investment company (OEIC) that satisfies six qualifying conditions. One is the genuine diversity of ownership condition, which requires the PAIF to include a statement in the fund documents that its shares will be widely available and marketed and to ensure that its shares are in fact widely marketed. As a result, PAIFs will only be a suitable choice of property holding vehicle if there are a number of investors. Only open-ended investment companies can apply to join the PAIF regime.
Last modified 27 Feb 2026
Must include at least one limited partner and limited partners must at the time of entering the partnership contribute a sum as capital valued at a stated amount. No pure capital can be returned to investors except on the winding up of the partnership without attracting clawback risk on such amounts (unless the limited partnership is designated a ‘private fund limited partnership’, in which case no such restriction applies). Although there is no legal minimum, there will be a threshold for commercial viability to ensure the professional costs of the establishment and administration of a property fund are met.
No minimum requirement other than for commercial viability. No distinction is required between the capital and the loan commitments from investors.
No minimum requirement other than for commercial viability.
In the case of a fund authorised by the Financial Conduct Authority (FCA) directed at retail investors it is likely that the fund’s prospectus will contain a minimum overall funding target so that there is a realistic prospect that the investment objective can be achieved and the manager remunerated on a commercially viable basis, because retail funds have to meet mandatory diversification requirements and will have certain fixed operation costs. The minimum target (the minimum aggregate subscription for viability) depends on the fund’s investment objectives and the remuneration expectations of the manager.
Non FCA-authorised funds often have a narrower investment focus and target a narrower investor basis (for example institutional investors only). There is more flexibility concerning the minimum amount that needs to be raised to reach the viability threshold.
There are no minimum subscription requirements for a private limited company.
The minimum authorised minimum allotted share capital for a public company is £50,000, of which at least 25% (of the nominal amount and of any premium) must be paid up.
There is no minimum capital requirement but the company must be listed in most circumstances.
Last modified 27 Feb 2026
The registration of a limited partnership with Companies House itself is subject to a GBP71 fee. However, the main costs involved relate to the negotiation of the limited partnership agreement, the setting up of various other entities (such as the general partner and the carried interest partner), together with the drafting of such other entities' constitutive documents. Costs vary from GBP50,000 for a simple JV property-owning limited partnership, to between GBP100,000 and GBP250,000 for the use of a limited partnership as a full property fund investing on a portfolio basis, depending on the complexity of the documentation. Set-up costs will commonly be paid from a first draw on investor commitments.
The main costs involved relate to the negotiation of the members' agreement. Limited liability partnerships (LLPs) are more often used in the UK (of which England and Wales form a part) not as fund vehicles for the acquisition of property (because they are not efficient vehicles for UK tax exempt investors such as personal or occupational pension schemes), but as vehicles for the fund manager since various tax advantages accrue to the principals of the fund manager in using an LLP rather than a limited company. An estimate of the costs of drafting a multiparty members’ agreement (excluding regulatory advice on the authorisation of the manager where required) is around GBP25,000 to GBP45,000 but this can vary depending on the complexity of the arrangements.
This normally costs less than setting up an equivalent limited partnership as a fund vehicle and tends to be used for single properties.
Between GBP60,000 and GBP100,000 depending on the type and complexity of fund, and whether or not it is authorised by the Financial Conduct Authority (FCA). A simple feeder unit trust for pension scheme investors could be set up for under GBP30,000. For an offshore feeder unit trust the costs of offshore counsel also need to be factored in.
Costs vary depending on complexity. An off-the-shelf company normally incurs a nominal fee of around GBP250.
Costs vary depending on complexity.
For new companies, the previous entry charge (equal to 2% of the gross market value of properties involved in the tax-exempt business) has been abolished but the cost of obtaining and maintaining a public listing are substantial and so are only appropriate for vehicles with an excess of GBP100 million of net assets.
Last modified 27 Feb 2026
At present, limited partnerships may only be registered at Companies House using paper filing and the registration usually takes several days from delivery of the registration application with Companies House. Once registered, the Registrar will issue a certificate of registration and the limited partnership becomes operative. How long it takes to become economically viable is a separate question. Where a limited partnership is used as a fund vehicle, it will be governed by a detailed limited partnership agreement and will generally not become fully operative until the first closing at which the investors are admitted as limited partners and the commitments made to the limited partnership allow the general partner to conclude transactions in the knowledge that there is sufficient equity funding (together with the relevant debt) to enable the first investments to be made. It is common for property funds of this type to go through a number of closings (with appropriate adjustments being made among the investors to ensure fair treatment between the investors).
The incorporation of a limited liability partnership (LLP) (which can be effected in a single day) confers a legal personality on the LLP and allows it to carry on its business. The relationship between the members is normally covered by a detailed members' agreement, although if this is not the case, certain statutory rules apply under which members participate equally in management, and share income and capital profits equally.
A syndicate trust is established by means of a trust deed. Generally, because syndicate trusts are used for the acquisition of single properties, the trust is normally created as the acquisition vehicle at the same time as the acquisition is made.
A unit trust authorised by the Financial Conduct Authority (FCA) is operative once a trust deed has been completed, investor subscriptions for the minimum aggregate amount have been collected, and FCA authorisation obtained. Obtaining FCA authorisation for a unit trust scheme can take up to three months, but may be quicker if the fund manager is already FCA authorised already running a number of unit trust schemes.
A non-FCA-authorised unit trust will become operative when the minimum viable commitments have been made to it, which is a question for the sponsor of the trust in the light of its investment objectives.
The incorporation process normally takes about a week, but same-day incorporation is possible for a higher incorporation fee.
About one week, subject to having minimum allotted share capital of £50,000 of which at least 25% is paid up.
The company must serve notice on HMRC (the tax authority) before the beginning of the accounting period for which it wants to join.
Last modified 27 Feb 2026
A limited partnership must have a general partner (GP), who is the only partner with the authority to commit the partnership to a binding contract. Limited partners (the investors) cannot participate in the management of the partnership, or they risk losing their limited liability status. Limited partners can be consulted on strategic issues and their consent can be reserved on constitutional and specific issues (generally through an Investor Advisory Committee) without prejudicing their limited liability. The GP will normally be a corporate SPV (special purpose vehicle), owned or controlled by the fund's sponsor. In joint venture limited partnerships, the GP will often be jointly controlled by the joint venture investor/parties. Under English law, the GP cannot be another English limited partnership and as such, it is not possible to "stack" limited partnerships.
Although a limited liability partnership (LLP) has its own legal personality distinct from its members, it has membership interests instead of share capital. These interests can be classified into different types in much the same way as share capital. An LLP can be run by a management committee appointed by its members. It can have a corporate managing member if desired (which can be a separate LLP).
The trust is run by trustees – normally consisting of two corporate trustees – owned by the sponsor/manager of the syndicate. The trustees generally delegate the day-to-day management of the property to a property manager who makes recommendations on key decisions, for example, purchase, sale, rent review and leasing.
The trustee acts as the custodian and overseer of the fund, which will be run by a Financial Conduct Authority (FCA) authorised manager in the UK (of which England and Wales form part). For a non FCA-authorised unit trust, the position will be governed entirely by its trust deed and by the agreement with the asset manager, which will contain substantial investor protections on a wide range of issues.
The Companies Act 2006 provides a comprehensive code regulating the rights and obligations of the company, its directors and its shareholders. If a private company has external shareholders (for example a private equity or venture capital investor), various detailed governance controls will likely be built into the articles of association of the company and into the shareholders agreement to protect the position of investors.
In common with private limited companies, the Companies Act 2006 provides a comprehensive code regulating the rights and obligations of the company, its directors and its shareholders. Public limited companies are in certain regards subject to more stringent corporate governance requirements than private limited companies. If a public limited company has external shareholders (for example a private equity or venture capital investor), detailed governance controls will be built into the articles of association of the company and into the shareholders agreement to protect the position of investors.
Safeguards apply in the case of a public limited company since, subject to compliance with the requirements of the EU Prospectus Regulation (EU 2017/1129) (as incorporated into English law by the European Union (Withdrawal) Act 2018) (which, with certain exceptions, require the production of a prospectus), a public limited company can offer its shares to the public. In practice, such an offering will either be made on a restricted basis to pre-qualified investors within the exemptions from the requirement to produce a prospectus, or in accordance with the rules of the relevant Stock Exchange with a fully compliant prospectus.
To qualify as a REIT, the shares of the company (or the principal in the case of groups) must be either listed on the Official List of the London Stock Exchange (or a foreign equivalent) or traded on a recognised stock exchange, which now extends to other London based exchanges, AIM and ISDX, throughout the accounting period. The listing/trading requirement is relaxed in a new REIT's first three accounting periods but a REIT can benefit from this relaxation only once and also does not apply for REITs where institutional investors hold at least 99% of the ordinary share capital of the REIT. The REIT must comply with the Financial Services and Markets Act 2000 (FSMA) and the continuing obligations for listed companies imposed by the Listing Rules and the Model Code. There is a further requirement that shares are actually traded. Therefore, an investment in a REIT is generally liquid. For these reasons, REITs are often attractive to retail investors.
There is no requirement for a PAIF’s shares to be listed or traded on a stock exchange, so various listing requirements will not apply. However, PAIFs are required to be authorised and regulated by the FCA and are therefore subject to detailed regulatory requirements in relation to their operation. Such requirements include an obligation to appoint an FCA authorised manager (known as the authorised corporate director) to manage the PAIF and to appoint an FCA authorised person to act as depositary of the PAIF.
PAIFs that are subject to the European Union’s Undertakings for Collective Investment in Transferable Securities Directives (UCITS) or classified as a non-UCITS retail fund are subject to additional requirements and are often preferred by retail investors because they offer an increased level of protection for investors.
Last modified 27 Feb 2026
Corporate and accounting compliance costs for limited partnerships vary depending on the extent and number of the properties held and the complexity of the partnership (for example in relation to profit sharing and expenses). It is therefore not possible to give a single figure. The Partnerships (Accounts) Regulations 2008 imposes certain requirements on members of a limited partnership to prepare audited accounts for limited partnerships that meet certain requirements. Audited accounts may need to be provided for the partnership to satisfy the information requirements of investors. A limited partnership operated as a property fund will normally constitute an unregulated collective investment scheme. As such, it will need to be established, operated and eventually wound up by a Financial Conduct Authority (FCA) authorised operator, who will commonly charge both take on and administration fees. These will also vary depending on the size and complexity of the scheme.
Corporate and accounting compliance costs vary depending on the extent and number of properties held and the complexity of the partnership (for example in relation to profit sharing and expenses). It is therefore not possible to give a single figure. If the limited liability partnership is used as a manager vehicle, additional costs may be incurred.
The ECTA changes that are applicable to limited companies (see below) will also apply to limited liability partnerships.
Recurring costs will be incurred for auditing the accounts and maintaining the two corporate trustees. If the syndicate trust is operated so that it is not a collective investment scheme where investors take part in all the key decisions, which could affect financial return, the cost of having an operator will be saved. However, the two trustee companies are likely to require the services of an administrator. The overall costs depend on the complexity of the trust and the nature of its investments, but are generally likely to be lower than for a limited partnership.
Annual administration costs will be charged to the investors in the case of a property unit trust and, as a proportion of funds invested, tend to be lower for larger property unit trusts than for smaller ones. The unit trust will also have to pay annual management fees and any performance-related fees for the manager. Administration and management fees vary depending on the type of fund.
Recurring costs include maintaining the company secretarial function and a registered office, and the production of annual accounts where required.
The implementation of the Economic Crime and Transparency Act 2023 (ECTA) has introduced increasing regulatory steps that limited companies will need to comply with, including:
Recurring costs include maintaining the company secretarial function and a registered office, and the production of annual accounts where required.
The ECTA changes that are applicable to limited companies (see above) will also be applicable for public limited companies.
Last modified 27 Feb 2026
Limited partnerships are tax transparent for tax purposes. An investment partnership will not generally be regarded as carrying on trade in its own right. Therefore, the income tax payable by the investors will depend on their individual circumstances. This means that a limited partnership registered in the UK (of which England and Wales form part) is a suitable vehicle for participation by UK tax-paying and tax-exempt investors (for example, charities or pension funds).
For UK capital gains tax purposes, all investors are regarded as owning a share of each underlying property investment. When a property investment is disposed of by the partnership, each investor is therefore regarded as disposing of their share, corresponding to the specific capital sharing proportions that are specified in the relevant limited partnership agreement. Capital gains tax charges can arise when new partners are introduced to the partnership if there is a revaluation of the partnership's assets or if payments are made between one or more of the partners outside of the framework of the partnership accounts. It is often the case that capital gains tax payments are deferred until the disposal of each property within the partnership. Each limited partner is responsible for tax on his share of the capital gain. The partnership is not a separate taxable entity.
A limited liability partnership (LLP) is tax transparent for UK income tax purposes and members are treated like partners in a general partnership provided the LLP is carrying on a business. However, an LLP which has its principal purpose as investment in real estate is not tax transparent for capital gains tax exempt investors, for example, pension funds.
An LLP is tax transparent except for capital gains tax exempt investors (for example, pension funds, personal pension schemes and charities).
The trust is regarded as tax transparent provided it is not a collective investment scheme.
Each investor is regarded as entitled to a share of profits corresponding to their beneficial entitlement under the trust. Accordingly, the trust is ignored for capital gains tax purposes and individual beneficiaries are subject to capital gains tax in relation to their proportion of the gains from the sale of property.
The tax treatment of the investors in the syndicate trust as described above is dependent on the trust not being regarded as a collective investment scheme. This means all decisions which could affect the financial return of the investors in relation to the property must be taken by the investors rather than being delegated to the manager or administrator of the trust or to the trustees (thereby giving investors the necessary day-to-day control over the trust property required by statute).
Property unit trusts are normally subject to income tax but income can be offset against loan costs and running expenses to minimise tax exposure. Income tax can also be reclaimed by investors in an exempt unauthorised unit trust.
The unit trust is exempt from capital gains tax either by virtue of FCA authorised status or the trust's status as not resident in the UK (of which England and Wales form part). With a dedicated unit trust for UK pension fund investors only (known as an exempt unauthorised unit trust scheme), the trustee will not be liable to capital gains tax where the unit holders are all UK tax authority registered pension schemes or UK-registered charities.
Any UK-incorporated company and any non-UK-incorporated company which is UK resident because it is managed and controlled in the UK, is subject to corporation tax on its worldwide income and gains, subject to applicable reliefs under a relevant double tax treaty. A non-UK-resident company is subject to corporation tax on its income and gains from any trade or business carried on through a branch or agency in the UK. Dividends received by UK corporate shareholders are usually exempt from corporation tax owing to the distribution-exemption under the corporation tax regime, save for dividends that fall outside of the exemption.
The position is the same as that for limited companies described above.
Last modified 27 Feb 2026
Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?
The term permanent establishment is not a generically used term in the UK (of which England and Wales form a part), other than for double-tax treaty purposes where the concept is relevant to the tax rights of the state in which a permanent establishment has been created.
Generally, for tax reasons, investors who are not resident in the UK would seek to avoid creating a permanent establishment in the UK.
The use of a UK limited partnership for inward property investment is not normally seen as the creation of a permanent establishment for UK tax purposes.
The basic cost of setting up a limited partnership is often minimal. There are, however, additional costs such as taking legal and tax advice on whether this is an appropriate vehicle and structure and substantial costs will be incurred in drafting and negotiating (where necessary) a suitable constitution for the investment vehicle which regulates the rights and obligations of the investors and as between the investors and the sponsor or investment manager.
A UK limited partnership can be established simply by lodging the relevant details with the UK Companies Registry. However, the establishment of an investment vehicle with negotiated terms which will be suited to investors and the raising of funding from investors for that investment fund may take considerable time and the relationship and rights and obligations between the partners is usually governed by a limited partnership agreement.
A UK limited partnership is generally considered a tax transparent vehicle with taxation applied at the level of the limited partners, to profits / losses that are received by said limited partners from the limited partnership.
UK limited companies are not tax-efficient vehicles for non-UK real estate investors since they are not tax transparent. One notable exception is the UK Real Estate Investment Trust, which is a company typically listed on a recognised stock exchange.
Where a permanent establishment takes the form of a UK incorporated company, UK company law applies, under the Companies Act 2006 and associated implementing regulations. This provides a comprehensive code governing the rights and obligations of the company itself, its directors and shareholders.
Certain aspects of company law relating to registration and accounts apply to non-UK incorporated companies with branches in the UK.
Where a LLP is used, this will be governed largely by the members' agreement, which regulates the rights and obligations of the LLP itself (which is a corporate entity in its own right with separate legal personality) and its members. The LLP will often be managed by a management committee of members who report to the membership at large. Although it is a corporate entity, an LLP does not have a share capital and is generally tax transparent for UK tax purposes. The Limited Liability Partnership Act 2000 and associated implementing regulations (the LLPA), provide the statutory framework within which LLPs operate, including rules on insolvency and measures for the protection of creditors. The LLPA contains many analogous provisions to those that apply to limited companies with certain modifications.
The Financial Services and Markets Act 2000 (FSMA) applies to all "regulated activities" carried on in the UK and can apply to a UK incorporated company, an LLP and a company incorporated outside the UK with a UK branch. Regulated activities include so far as relevant to inward UK property investment:
Though direct real estate investment is generally not governed by FSMA, where property is owned through any kind of corporate or collective investment scheme vehicle, there will be FSMA implications and specialist advice should be taken.
Last modified 27 Feb 2026