UK Law and Practice Contributed by: Colin Rodrigues and Harminder Sandhu, Hawkins Hatton Corporate Lawyers Ltd
5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity LLPs LLPs are comprised of members in partnership with limited liability. The relationship between the members is usually governed by a members’ agreement. An LLP is taxed in the same way as a partnership. Private Limited Companies Private limited companies are comprised of shareholders who own share capital of the com - pany proportionate to their individual levels of capital investment. Directors (who may or may not include shareholders) are appointed to run the company. The shareholders have personal liability protection, and their relationship is gov - erned by a shareholders’ agreement. This entity is liable for corporation tax, and shareholders A public limited company is a limited liabil - ity company, the shares of which may be sold and traded to the public and listed on a stock exchange. It can, therefore, raise money by sell - ing shares to the general public. 5.3 REITs REITs are a popular means for UK property investment as they benefit from tax exemptions on income and capital gains, especially given the UK corporation tax increase from 19% to 25%. Foreign investors are encouraged to consider REITs as a means of holding UK real estate. In December 2022, the UK government removed the requirement for a REIT to own a minimum of three properties, provided that the portfolio con - tains a single property valued at GBP20 million. Further changes to REITs were proposed in 2023 to improve the tax rules, and these reforms only pay tax on dividends. Public Limited Companies
projects, or the provision of new highways or drainage systems. The objective of such agree - ments is to mitigate the effects of development. 4.7 Enforcement of Restrictions on Development and Designated Use If the LPA considers that planning has been carried out in breach of the terms of the plan - ning permission, an enforcement notice will be issued. This notice will identify the breach and stipulate what steps the LPA intends to take. Failure to comply with an enforcement notice could result in a fine. Alternatively, a breach-of- condition notice can be given as an alternative to an enforcement notice, in which case the developer is required to remedy the breach of condition. During the development, the LPA will undertake site visits to inspect compliance with build - ing regulations. Failure to comply can result in enforcement action in the form of prosecution and/or an enforcement notice requiring the alter - ation or removal of work that contravenes the regulations. If the owner does not comply with the notice, the local authority has the power to undertake the work itself and recover the costs from the owner. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets Entities available to investors to hold real estate assets include: • limited liability partnerships (LLPs); • private limited companies; and • public limited companies.
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