JPUT or RIF: Choose the Best Structure for UK Real Estate Success

As green shoots slowly start to emerge in the UK real estate market, investors are once again sitting up and taking notice of the sector.

While some allocators are continuing to use the tried and tested Jersey Property Unit Trust (JPUT) as a structuring route for UK real estate investments, others are scoping out the UK’s Reserved Investor Fund (RIF), a recently launched onshore collective investment scheme (CIS).

Simon Gordon, Will Turner and John Forbes of John Forbes Consulting look at the difference between the two structures and their benefits.

After a challenging few years, the UK real estate market is beginning to stabilise.

Sticky inflation, high interest rates, political uncertainty and a tough economic backdrop have caused problems for the UK real estate market, both from a direct investment and fundraising perspective. Until recently, real estate values were falling, but there are signs this has since bottomed out, and we are now seeing values stabilising and starting to rise again in many sectors.

This comes as all indicators suggest that 2024 is poised to become the first calendar year since 2021 for UK real estate to post positive returns¹, amid falling rates and inflation and improved political stability.

Investors are continuing to favour properties in the living sector, including student accommodation and built to rent, together with industrials and logistics. We have also seen moves by large investors into some of the – arguably more unloved – areas of the UK real estate market, such as retail and regional office space, particularly in areas outside of London, where valuations have dropped fairly significantly over the last five years.

Although US trade tariffs could cause inflation and interest rates to spike putting a pause on some investors’ plans, allocators are still taking a keen interest in UK real estate and have a choice of how to invest.

The JPUT

A JPUT is a type of Jersey trust used to acquire and hold assets that is particularly well suited to UK real estate and is typically used for single assets or small portfolios with one or a small number of overall investors

What are the advantages of JPUTs?

The JPUT is a well-established and well-recognised structure, particularly for UK Real Estate. In addition to being incredibly flexible, units in a JPUT can be secured as part of a debt financing package, making them an attractive option when leveraging an acquisition. The units also should not attract Jersey or UK stamp duty when traded. It is also possible for JPUTs to elect to be transparent for income and capital gains tax purposes in the UK, making it effectively tax neutral.

This can be attractive for tax exempt investors, such as pension funds or sovereign wealth funds as it ensures that investors are taxed at their level based on their own tax status. We continue to find JPUTs are a key preference for different investors and are common in joint venture type arrangements as well.

Other benefits of the JPUT, according to law firm Appleby, is that they can be structured in a way to give unitholders greater control, there are no audit requirements (unless a regulated fund), and they are easy to wind up².

JPUTs provide a great option for investors to structure their UK Real Estate investments though and many find the flexibility and tax neutrality make the JPUT very favourable to other structure types. However, JPUTs may not be the best solution for all investors, particularly where there is a preference for an ‘onshore’ structuring solution.

The UK RIF

The UK RIF is a more recent option, having progressed under the former Conservative Government and completed following Labour’s election win, finally coming to market in March 2025, and will be another complement to the UK’s existing funds regime.

The UK RIF is transparent from an income tax perspective, exempt from capital gains tax, and can take advantage of seeding relief under the Stamp Duty Land Tax when contributing a minimum of £100 million of assets in return for the issue of units (subject to certain conditions).

Perhaps most significantly is that the RIF is an entirely ‘onshore’ product, which may appeal to certain investors that are sensitive to investing ‘offshore’, e.g. public sector pension funds, who may be prohibited from investing in funds domiciled offshore, but still want exposure to illiquid assets.

RIFs are likely to appeal to closed ended or evergreen funds focused on real estate and several clients have spoken to JTC about the idea of launching one.

Although the UK RIF has been described as an onshore version of the JPUT, there are some nuances between the two structures. It could be argued that as a CIS, the RIF is more suited as a fund structuring product, whereas a JPUT would be better utilised for a single investor or joint venture arrangement.

However, there are some possible drawbacks.

RIFs are only suitable for professional investors (or certain high net worth investors) and are required to meet a non-close or genuine diversity of ownership (GDO) test. In practice the GDO test means the RIF would need to be widely marketed to unconnected investors and therefore would likely not be a suitable option for a single investor or a joint venture arrangement.

As RIFs are very new to the market, they don’t yet have a track record, and the regime under which they can be formed is relatively complex, which may put off some investors.

The cost economics of RIFs are also open to debate. RIFs are subject to the Alternative Investment Fund Managers Directive (AIFMD), so must appoint an Alternative Investment Fund Manager (AIFM) to manage the RIF, and a depositary to oversee asset safekeeping, cash-flow monitoring and service provider activities. There is a level of cost associated with this that would be better suited to a fund with a reasonably substantial level of assets.

According to John Forbes, who is a leading advisor on the structure and operation of real estate funds, “the huge attraction of the RIF is that it allows different investors with different tax and regulatory characteristics to investors through a pooled, onshore vehicle to invest in UK real estate. For example UK defined contribution schemes investing via a long-term asset fund (LTAF), UK local government pension schemes (LGPS) investing via a pooling Authorised Contractual Scheme (ACS), sovereign wealth funds investing via a Jersey limited partnership and other overseas investors investing via UK unlisted REIT held by a Jersey fund. As RIFs are set up, there is an opportunity for Jersey to be the entry point for foreign investors.”

Choosing the right provider for your investment structure

Regardless of how investors choose to access the UK real estate market, whether it be via the JPUT, the RIF, or any other structure option, choosing a service provider with the right expertise will be key to success.

JTC has extensive operations in the UK, Jersey and many other key structuring jurisdictions for UK real estate including Guernsey, Luxembourg and Ireland, along with a deep pool of subject matter experts capable of supporting a wealth of different structures.

For more information on how JTC can transform your investment strategy and maximise your returns contact:

Simon Gordon: Senior Director – Fund & Corporate Services
[email protected]

Will Turner: Director – Fund & Corporate Service
[email protected] 

[1] Aberdeen Investments – February 11, 2025 – UK real estate market outlook: Q1 2025

[2] Appleby  – August 7, 2020 – Jersey Property Unit Trusts Guide