Holding Commercial Property in Trusts and Partnerships

Beyond personal, company and pension ownership, commercial property can be held through trusts, partnerships and unit trusts. These structures suit particular goals, especially succession and joint ownership.

Partnerships and LLPs

A partnership or limited liability partnership (LLP) can hold commercial property where several people invest together. Partners are generally taxed on their share of the profit directly. Note that moving property into or out of a partnership has specific SDLT rules that can differ from an ordinary sale, so take advice before any transfer.

Trusts

Holding property in a trust can help with succession and control, allowing you to pass on value while managing who benefits and when. Trusts have their own tax regime, including potential inheritance tax charges, and are a specialist area, so they are set up with professional advice for a clear purpose rather than by default.

Unit trusts and JPUTs

Larger and joint investors sometimes use property unit trusts, including offshore vehicles such as Jersey Property Unit Trusts (JPUTs), for pooling investment and for tax and transfer efficiency. These are specialist structures for bigger deals.

Match the structure to the goal

Each structure has different tax, cost and complexity. Personal, company or pension ownership suits most landlords; trusts, partnerships and unit trusts come in for succession, joint ventures and larger portfolios. Take tax and legal advice before choosing, because unwinding the wrong structure is expensive.

Can commercial property be held in a trust or partnership?

Yes. Partnerships and LLPs suit joint investment, and trusts help with succession, though moving property in or out of a partnership has specific SDLT rules.

Which structure should I use?

Personal, company or pension ownership suits most landlords; trusts, partnerships and unit trusts come in for succession, joint ventures and larger portfolios.