A Qualifying Property Company (QPC) is a company that is set up specifically as an investment vehicle to allow investors to invest into commercial, residential and mixed use property. This company can then invest in any number of property or property related investments and make use of the tax advantages offered by Her Majesty’s Revenue and Customs (formerly the Inland Revenue).

The benefits of investing into QPCs are outlined below:

• Estate Planning / Inheritance Tax
• Control of the Company
• Project Selection
• Market Conditions

Estate Planning

Once an Investor has held their shares for 2 or more years, the shares qualify for Business Property Relief (BPR). This means that the Shares could avoid 100% of Inheritance Tax (IHT) that otherwise would be due on the value of the investment upon the investors death.

If an investor should die before the 2 year period ends, the IHT due on the amount invested can be paid in instalments, on an interest free basis over the following 10 year period.

Control of the Company

As the company is set up by the investors, it is entirely under the control of the investors. Investors can therefore choose to be very much involved in the investment process.

Project Selection

Investors have influence and control of investment decisions as to which projects to invest in. Investors can therefore choose whether to use discretionary services allowing qualified experienced experts to make decisions for them, or to be involved in the decision making process. Many investors make use of both options by receiving recommendations from the experts and still maintain a large degree of control over their investments.

Market Conditions

Government statistics show that UK employment is at its highest since 1990, whilst Britain’s Gross Domestic Product (GDP) growth has been slowly and steadily increasing. Inflation in the UK has been one of the lowest in Europe over the last 5 years, whilst interest rates have remained fairly stable and even after recent increases, are still below 6%.

All of these facts lend themselves favourably to property investments as growth and higher employment means there will be more individuals and companies looking for property, as well as the average expenditure on property rising due to the increased demand and the larger sums of money available. This makes both the rental and purchase markets more attractive.

Interest rates staying relatively low and consistent also assist the confidence of prospective tenants and buyers.

There is little doubt that there is a shortage of new housing that is struggling to keep up with the growing population.

All of the above statistics outline the fact that demand for property is less likely to fall than it was in previous market conditions and therefore property investments are a more attractive proposition today than in previous years.

Please note that the value of property investments may not always be readily saleable. This is down to the fact that property purchase and disposal transactions tend to be large, complex and take time to complete. This may mean there could be a delay on cashing in units.