There is now a legal requirement for at least one human director which will be one of the directors of Kildrummy.
The new nominee company will enter into a Declaration of Trust to declare that it holds the property as legal owner on trust for the syndicate of participating investors, each of whom will own a defined share of the property (Equitable Title). The company will be a UK based special purpose vehicle (“SPV”) and after the sale of the property within a syndicate the company will be struck off to ensure that no residual liabilities arise thereafter.
The SPV itself will have no value – it will be purely a nominee company and will be non-trading. It will have an issued share capital of £1 and this share will be held by D&A Nominees Limited, Druces LLP’s in-house nominee shareholder (Nominee Shareholder). No shares in the SPV will be allocated to investors at any time and the SPV will file dormant company accounts each year.
Participating investors can be a mixture of private individuals, companies, overseas investors, offshore funds, charities or any pension schemes. Druces LLP have undertaken many syndications in the past, especially for Small Self Administered Pension Schemes (SSAS) and Self Investing Personal Pension (SIPP) clients, for whom these have proved a secure and ideal investment vehicle (subject to complying with the relevant gearing ratios).
The advantages of this Trust Based Structure are as follows:
- Tax transparency.
- No statutory regulation.
- Low start up costs.
- Enhanced comparative yields because of low start up cost base.
- Speed of set up.
- Ability to secure non-recourse finance with no personal liability for participating investors.
- Direct property interest for each syndicate investor.
- Anonymity as information not in the public domain.