High net worth investors will now have another tax-efficient opportunity to invest in the UK commercial property market. Specialist prop...

High net worth investors will now have another tax-efficient opportunity to invest in the UK commercial property market. Specialist property consultancy Strutt & Parker, through its Strutt & Parker Real Estate Financial Services division, has launched the SPREFS Property Development Fund, the first in a series of property development funds fully eligible for inheritance tax business property relief. The minimum investment will be £250,000 ($446,000) and HNWs will gain indirect access to the UK commercial property development market through a vehicle which qualifies for IHT Business Property Relief, said Strutt & Parker. After a two-year qualifying period, the vehicle will not be subject to IHT upon the death of the investor and will therefore mitigate the total amount of IHT payable on the investor’s estate. The fund is expected to have a life of five years and a minimum size of £6 million. It will adopt a risk averse strategy by diversifying risk across a number of different development projects. The fund is hoping to achieve returns of 10-15 per cent per annum. “We recognise that IHT is a growing problem in the UK with the threshold of £275,000 now affecting the vast majority of UK homeowners. This fund not only offers investors access to a niche asset class managed by real estate experts but also the additional benefits of an inheritance tax shelter, which will act to mitigate the total amount of tax payable on their estate,” said Simon Popple, head of investment management at SPREFS, in a statement.