Unit holders of Legal & General’s GBP1.3 billion UK Property Unit Trust have voted overwhelmingly in favour of converting the fund into a Property Authorised Investment Fund (PAIF) structure.
The conversion will take place on 27 May 2014, resulting in more tax-efficient income for many investors in the fund.
The conversion of L&G’s UK Property Unit Trust into a PAIF means distributions from rental income and interest can be paid out gross to qualifying investors, benefiting those investing through an ISA or within a pension. It also involves the creation of a feeder fund within a unit trust, allowing all unit holders who are ineligible or unable to invest in a PAIF to continue to remain in the fund. After conversion, the PAIF will be called the Legal & General UK Property Fund.
One of the fastest growing funds in its sector, launched in 2006 the fund has grown from GBP100 million to over GBP1.3 billion since inception and continues to see steady inflow of capital from both Retail and Institutional investors.
Michael Barrie, director of fund management and co fund manager of the UK Property Unit Trust at Legal & General Property, says: "Continuing to support retail investors’ search for income yield, we believe that greater tax efficiency brought about by the PAIF structure will help ensure that the UK Property Unit Trust remains attractive to investors over the long-term.”