Property Syndicate

S

San Martino

Registered User
Messages
45
Hi,

A few friends and myself, all of whom have some property investment experience, are considering setting up a property syndicate to invest in other EU countries. We are looking at a ten year investment term approx and will be looking for specialist tax advice in relation to the structure of the syndicate.

Can anyone recommend a good tax specialist for this venture and has anyone got a 'draft' legal agreement that we might use as a starting point for deciding things such as management of the syndicate, entry/exit mechanisms etc - maybe we should get legal advice to cover this as well?.

Thanks in advance for any assistance!
 
sounds great :) , 10 or so reasonably expert persons can always bate the "professionals" at their antics.

your best bet ...initially.. is to bang an agreement together and post in here for comment to clean it up . Then go to a legal expert with that in the end to save money coz its kinda done for them..

get a racehorse syndicate template agreement and rework a bit for starters :)
 
Assuming that this is going to be a million euro (or larger) deal, I would caution against the 'DIY' approach to such an agreement. Get professional advice.

The AAM Buying property with a friend key post might give you some food for thought on the areas to be covered, but this is not intended to be used for commercial property syndication.
 
Hi SM - thinking of doing the same kind of thing with some friends / colleagues. Have you managed to organsied finance and if so could you tell us where. My difficulty is that we can raise a max of 70% with foreighn bank but only 50% in non-recourse situation. For a syndicate I can't see how you can have anything but a non-recourse for example how can a bank have a lien on 6-10 people's houses? If you have any insights on the above I would much appreciate them.

Thanks
MAC
 
Hi Mac,

Our plan is based on raising capital against existing property in ROI, then investing this monies in a 'special purpose' company. This Irish company will own a subsidiary company in another EU country and will make any invetments through the subsidiary.

No income will be repatriated to the Irish company for the duration of the investment, which will mean no income tax liability in Ireland. The foreign subsidiary will initially buy some property for cash and then hopefully over time it will use a combination of income and borrowing to finance further investments. After, say, 10 years both companies will be liquidated and we will only be liable to capital gains tax (hopefully at 20%), rather than income tax (at 42%+ levies) on the profits!. Obviously the downside is that the initial capital will have to be financed from existing sources

That is the theory anyway, I agree with Rainy Day that we need professional advice, I just want to know as much as I can before I get it!

Thanks for all the responses!
 
Where in the EU are you looking to invest San Marino
 
No, we have not gotten professional advice yet, but if there are no profits repatriated to Ireland, it seems logical that there would be no tax liability. Do you know whether I'm right/wrong in this regard?.

Cheers
 
The Irish Revnue can look through the actual place of residence of a company controlled from Ireland and deem it to be an irish-resident company irrespective of where it is established

Look at the Revenue webiste [broken link removed]

The term 'residence' was not, until recently, defined in law. The general rule was that companies, whose 'central management and control' was exercised in the State, were treated as resident here. This rule or test emerged as a result of judicial decisions set down in case law. Factors to be taken into account in establishing where the company's central management and control lie include, for example, where the important questions of company policy are determined, where the majority of directors reside, where the negotiation of major contracts is undertaken and where the company's head office is located.


There are planning arrangements that can be used to negate this but as always they will cost money and must be in place prior to setting anything up

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