The underlying principle of the Limited Partnership Structure is for a group of investors (but targeting SIPP, SSAS and private investors) to buy a property together via a tax-transparent, limited partnership (LP) structure, in order to gain the benefits of direct property ownership. The LP is defined by the FSA as an unregulated collective investment scheme (UCIS).
The aim of the structure is:
The recommended investment strategy is for investors to diversify their portfolios across a number of assets in individual investments of between £10,000 and £50,000.
An important distinction between this model and a property fund, is that each property is owned (via the LP structure) by a separate group of investors, who have individually selected the assets in which they want to invest.
Any debt is arranged on a non-recourse basis with each investor’s liability limited to the amount of their investment in the LP. The general partner (a Custodian Capital limited company) will hold legal title to the property in its capacity as general partner to the LP. Each investor will be a limited partner in the LP. An investor’s interest in the LP and the property will be expressed as a specific percentage of the whole and recorded at Companies House.
The general partner and the operator (Custodian Capital Limited in its capacity as a FSA authorised and regulated operator of UCIS) will be responsible for the operation and management of the LP and its assets. The limited partners will not take part in the LP’smanagement or operation, although they will be given the right to vote on certain issues, to include:
The general partner of each limited partnership (LP) instructs Custodian Capital Limited to establish and operate each LP as a UCIS.
The properties are professionally managed by Custodian Capital.
Each LP is valued twice a year as at 5 April and 5 October. Each property is inspected annually by our independent valuers; Lambert Smith Hampton, who carry out an open market valuation as defined by the Royal Institution of Chartered Surveyors.
The LP accounts are prepared by Custodian Capital and independently reviewed by our accountants Stephenson Smart & Co.
Cash flow forecasts are re-assessed based on prevailing interest rates, property valuations, rental values and forecast rental growth using a bespoke model built jointly by Ernst & Young and Custodian Capital.
