//newsletter script; hides/shows newsletter articles

//newsletters -----------------------------------------------------------------------------------
family_office = '<p class="news_title">The Family Office</p>' +
'<p class="news_txt">Growth in global super wealth has created an escalating demand for the family office.  The single family office should be differentiated from multi-family service providers, often trust companies or investment advisers, who may provide bespoke, but non-exclusive, services.  Whilst seemingly attractive, a family office is expensive to run.  If one assumes a minimum of three or four qualified and experienced professionals with perhaps the same number of support staff and normal business expenses, the annual running costs could easily be £1million.  In comparing this to an asset management fee of around 1%, it indicates that a family office needs £100 million of assets under its stewardship.  Clearly, there is commercial logic for both parties in benefiting from economies of scale.  The multi-family office is a very successful model and provides a facility somewhere between a professional trustee, who will most likely outsource non-trustee functions, and the single office.</p>'+
'<p class="news_txt">The main reason that an ultra high net worth family would establish an office is to provide completely confidential, specialist support.  It provides a robust and proficient framework to protect and enhance assets in the long term and to satisfy the daily requirements of the family.  Implicit is both helping to mould the long-term family strategy as well as catering for the necessary compliance of managing substantial sums.  This is best done within agreed lines of governance to avoid friction between individual family members and the office, thus leaving the latter to focus on optimising performance and fulfilling the agreed family requirements.  It is worth documenting these duties for the sake of clarity, especially if there are a large number of family members.  It is reasonable though to expect that at such a high cost, family members should receive comprehensive and timely service and advice.</p>'+
'<p class="news_txt">The sort of services often depends on the background of the wealth creators and beneficiaries, especially if some or all of the current generation are commercially active.  The common requirements are, however, investment and treasury capabilities as well as performance measurement and reporting.  It would also be normal for the office to be responsible for the retention and necessary filing of all financial and statutory records.  Equally, duties could include such diverse tasks as sourcing real property, arranging security, travel or managing household staff.</p>'+
'<p class="news_txt">It is normal for a family to wish to structure its affairs to preserve wealth through the generations.  This implies the use of trusts and, due to the magnitude of wealth and the possible disposition of the beneficiaries, international corporate or partnership structures.  It is not surprising, therefore, that many family offices are based in offshore jurisdictions.  The use of international holding structures will allow for efficient cross border finance and, combined with trusts, should provide opportunities to mitigate tax.  Trusts may enable the initial wealth creators to set the path for succession planning and help avoid domestic tax issues in the country of residence of individual beneficiaries.  It is common for those who have created enormous wealth to consider their long-term residence to avoid certain tax liabilities; albeit entrepreneurs who have created wealth in one jurisdiction may be loath to become an exile from their original home. </p>'+
'<p class="news_txt">A family office may also help to protect assets in cases of matrimonial dispute or spendthrift beneficiaries.  A senior officer may cause less offence than a family member in advising beneficiaries on the use of pre-nuptial agreements.  Spendthrift trusts have been available for many years and more recently, purpose trusts have become generally accepted.  A purpose trust will not have named beneficiaries but may have non-charitable objectives.  The objective may be devised such as to protect and enhance the wider family wealth but, by avoiding the identification of potential beneficiaries, avoid attack.  </p>'+
'<p class="news_txt">Many wealthy families wish to be philanthropic.  Whereas in the past, funds were donated often to external charities, some wealthy families prefer to establish their own foundations.  It should be anticipated that the same investment and administrative rigours will apply to their charitable works as are dedicated to their own wealth.  The tax treatment of, especially international, donation is complicated; indeed many managers consider philanthropy to be a distinct and separate service provision.  </p>'+
'<p class="news_txt">As is readily apparent, the skills required by a family office are broad and demanding and so effective staffing is critical to its success.  Paramount is the need to be diplomatic, dedicated and professional.  Whilst it is possible to refer to external advisers, the family would expect answers to be readily available.  This puts strain on the office employees as not only do they need detailed knowledge of the family”s affairs, they also need to develop strong links with the external professionals who can promptly augment the in-house capabilities.  The single family office faces the conundrum of being an integral part of the family”s life yet remaining sufficiently detached to enable it to perform its duties, sometimes dispassionately.   </p>'+
'<hr size="1">' +
'<p class="news_italic">Michael Farrow MSc FCIS TEP is a Director of Consortia Partnership Limited, a Jersey regulated provider of trust and fund services, who has previously run a single family office.</p>';



carbon_funds = '<p class="news_title">Carbon Funds</p>' +
'<p class="news_txt">Whilst excusing the pun, there are few hotter current topics than carbon emissions and climate change.  The recent G8 meeting in Heiligendamm, Germany failed to deliver the detail required to progress some of the major polluting nations, particularly the US, beyond political platitudes.  The commercial world, however, is not so reticent with Citigroup indicating in May 2007 that they would invest $50bn into clean energy and sustainability over the next 10 years.</p>' +
'<p class="news_txt">The global carbon market tripled in size in 2006 to $30bn according to the World Bank.  The majority of this figure is made up of EU Allowances, worth nearly $25bn with the balance being almost completely the Kyoto’s, Clean Development Mechanism (“CDM”) and Joint Implementation (“JI”).  From an investors’ perspective this level of trading makes carbon funds attractive to maximise return, reduce price volatility and reduce risk.</p>' +
'<p class="news_txt">Trading under the Kyoto Protocol (“Kyoto”) started in earnest in early 2005 following both its own entry into force and the launch of the EU Emissions Trading System (“ETS”).  Kyoto has been ratified by 168 countries and envisages an effective market in tonnes of Green House Gasses (“GHGs”), each representing a “credit”, to drive down global pollution.  Fundamentally, this works by monetising the credits and enabling them to be traded.  Kyoto set a global target for emission reductions which has been divided amongst participating countries, whose governments have allocated, auctioned or sold credits to specific polluting industries and on to specific polluters.  Any company that exceeds its emissions beyond its allocated allowances will have to either buy allowances or to pay penalties.  A company that emits less than expected can sell its surplus allowances to those with shortfalls.  Further, the scheme also allows companies and governments to purchase credits from projects which save emissions. The proceeds of the sale of such credits provide the money necessary for polluters to clean up their businesses.  This is not to say that other systems to encourage reductions do not exist.  The UK has had, for example, an energy tax on gas and electricity, known as the Climate Change Levy, since 1998.</p>' +
'<p class="news_txt">The carbon trade is global and so relies on a degree price stability of credits to provide predictability of income.  Clearly, a polluter such as a major manufacturer, needs to work on a long planning cycle to replace or introduce new machinery which requires some certainty of income.  Nearly all primary contracts for the purchase of carbon credits are executed on a “best efforts” basis.  If the producer of the pollution is unable to deliver the anticipated tonnage of credits then there is no recourse.  This leaves significant risk exposure on the purchaser.</p>' +
'<p class="news_txt">Many contracts for carbon are executed on a fixed price whilst some have a floor price with a shared upside.  A significant part of the market, however, is still a matched market, i.e. willing buyers and sellers have to engage directly.  A fund can provide liquidity and assist with timing concerns for sellers as well as provide good financial returns for investors.  Large funds also have the effect of smoothing the price which, to date, is proving elusive.  The anticipated positive yield curve for carbon is attractive, not withstanding the risks already alluded to.</p>' +
'<p class="news_txt">The major issues for fund managers derive from the immaturity of the market and the uncertainty of supply.  A derivatives market is developing but the current price of buying an effective hedging strategy is prohibitive.  The common way of dealing with delivery risk is to discount mathematically the carbon under contract but this creates an arbitrary figure which, whilst giving a degree of comfort, does not cater for a substantial reduction in tonnage.  Further, the price of credits has fluctuated and, although having enjoyed a significant rise in early 2006, has suffered considerable volatility.</p>' +
'<p class="news_txt">The fund manager needs to have the relevant skills’ sets and jurisdictional regulatory approval.  As the market is developing many of the carbon fund managers have come from a background of equity and bond trading having learnt carbon skills en route.  There is, initially, a bewildering set of mnemonics to master and constraints based on the immaturity of the market to cope with, but it is an exciting and dynamic opportunity to provide lucrative financial services whilst helping improve the environment.</p>' +
'<p class="news_txt">For Jersey, a key element to our future as a location for carbon fund management is the adoption of the Kyoto Protocol in May 2007.<sup>1</sup> Whilst accreditation of schemes is controlled by the United Nations (“UN”) it is essential that the corporate seat of the signatory to the various reduction agreements is within a Kyoto jurisdiction.  Further, the tax treatment of Jersey managed and controlled carbon funds for UK investors is little different to the treatment derived from investing in all offshore funds.  It is imperative that the advisers to the fund have arm’s length agreements to avoid an establishment in the UK.  The offshore fund may also seek Distributor status to enable UK investors to benefit from capital gain, rather than income, tax treatment.</p>' +
'<p class="news_txt">In summary, recent changes in our laws and a mature infrastructure of funds’ expertise makes Jersey an ideal location for the establishment of carbon funds.</p>' +
'<p class="news_italic">Michael Farrow MSc FCIS TEP is a Director of Consortia Partnership Limited, a Jersey regulated provider of trust and fund services and of Camco International Limited, a London listed carbon developer.</p>' +
'<hr size="1">' +
'<p class="news_footer"><sup>1</sup><a href=" http://www.gov.je/StatesGreffe/MinisterialDecision/ChiefMinister/2006/un+farmework+convention+on+climate+change+ratification+of+the+kyoto+protocol.htm">Jersey Kyoto Ratification</a></p>';

jput_vs_reit = '<p class="news_title">Will property work continue at its rate of last year in Jersey despite the arrival of REITs in the UK and UK investors no longer being able to transfer property to offshore trusts to avoid SDLT?  What are the continuing attractions of offshore property funds?</p>' +
'<p class="news_txt">There are many long standing attractions to offshore unit trusts for transferring and holding UK property.  For the last few years the Jersey Property Unit Trust (“JPUT”) has been particularly advantageous as an investment vehicle.  Its principal advantages are speed of creation in a flexible regulatory environment; offshore mitigation of capital taxes and, up to 22nd March 2006, the avoidance of Stamp Duty and Reserve Tax (“SDLT”) on the transfer of ownership.  These facets made the structure especially appealing to international investors.  Similar advantages applied to the Very Private Unit Trust (“VPUT”) which is designed to cater for 15 or less unit holders and enjoys a lighter regulatory touch, being well suited to family or similar investors.   Whilst the removal of seeding relief at the last UK Budget was a set back for the growth in number of JPUTs, nonetheless, their popularity remains.   Further, the common, current UK alternatives, being an authorised or unauthorised unit trust, have their disadvantages.  The former suffers from restricted leverage whereas the latter precludes the mixing of exempt and non-exempt investors without potentially tainting the tax status of the exempt investor.  On reflection, it would be hard to find a substantial UK commercial property transaction that does not have an offshore unit trust involved in its ownership structure.</p>' +
'<p class="news_txt">The tightening of SDLT avoidance did not start with offshore collective investment schemes.  Article 304 of the Finance Act 2004 removed SDLT avoidance for UK Limited Partnerships.  From this point on most observers considered it was simply a matter of time before the Chancellor took similar action against offshore unit trusts.  However, in the world of taxation there is an accepted dynamic between HMRC and the ingenuity of the tax adviser.  Although the planning environment is changing with the wider application of the Disclosure of Tax Avoidance Schemes, the UK does not apply general anti-avoidance rules and so one should assume that new mitigation schemes will arise.</p>' +
'<p class="news_txt">In order to maximise tax efficiency for UK investors, offshore collective investment schemes must be granted “distributing fund” status.  Three main conditions apply; firstly, the UK resident investor must dispose of any material interest; secondly, it must be an offshore fund and, lastly, the fund must distribute at least 85% of its income.  If correctly structured, the offshore fund should not fall foul of ICTA 1988 ss.759 and 760 and so enable tax to be deferred.</p>' +
'<p class="news_txt">There are reasons other than tax why investors and managers might want to use Jersey as a domicile for their funds.  For the last few years the volume of assets within Jersey real estate funds has grown exponentially to a reported £21,679 million at 31st March 2006.  This level of business has created a local level of expertise renowned for the creation and administration of these types of funds.  Whilst taking advantage of the well known benefits of Jersey as a jurisdiction, investors have also been able to gain from the developing knowledge and network within the supporting professions.</p>' +
'<p class="news_txt">The main attraction of the UK Real Estate Investment Trust (“REIT”) is that it provides a tax efficient method for UK residents to invest into both commercial and residential property.  To avoid corporation tax, and thus make the vehicle tax neutral, the REIT must comply with a series of rules; primarily being that it must:</p>' +
'<ul>' +
'<p><li class="news_txt">be a UK tax resident company</li></p>' +
'<p><li class="news_txt">be listed on a recognised investment exchange</li></p>' +
'<p><li class="news_txt">be a closed-ended company</li></p>' +
'<p><li class="news_txt">only have one class of ordinary shares</li></p>' +
'<p><li class="news_txt">must have only commercial debt arrangements</li></p>' +
'<p><li class="news_txt">possess at least three single properties</li></p>' +				
'<p><li class="news_txt">not contain a property worth more than 40 percent of the total portfolio</li></p>' +
'<p><li class="news_txt">distribute 90 percent of its net taxable profits from its rental business</li></p>' +
'<p><li class="news_txt">source 75 percent of the total profits from the tax exempt property letting business</li></p>' +
'<p><li class="news_txt">engage 75 percent of its assets in the tax exempt business</li></p>' +
'</ul>' +
'<p class="news_txt">In addition, there are tax charges, although no loss of REIT status, for breaches of an interest cover test, which applies a limit on the ratio of profits to interest of 1.25, or where investors have shareholdings of greater than 10 percent.</li></p>' +
'<p class="news_txt">REITs have to satisfy a number of parties including the investor, the existing property company and those promoters seeking to establish new co-investment structures.  To the investor, the REIT’s attractiveness is based on tax transparency which maximises any tax allowances available to the investor, whilst avoiding tax being levied on the investment structure.  It is anticipated that, by conversion, existing listed property companies will form the main source of REITs.  For promoters seeking to originate a REIT, the Association of Investment Trust Companies (“AITC”) notes that there would be considerable start up costs.  A new REIT would have to establish itself as a conventional property company and buy property before it could raise money and then convert to the REIT structure.  Not only does this have significant cost implications but also would create a lengthy delay before the company was active.  The charge for establishing a new REIT could be as much as 10% of the value of the underlying assets.  This figure comprises of 4% SDLT, a conversion charge of 2% on top of the broker’s fee on placing of 2% to 4%, not to mention the inevitable professional fees.  However, in the recent half yearly statement of Liberty International Plc the Chairman wrote, “the charge for entry into the UK REIT regime … would amount to some £136 million (39p per share) on the basis of market values at 30 June 2006.  This compares with our current liability for tax on capital gains, if our UK assets were sold at market value, of around £630 million (179p per share).”  This forms a very persuasive case for change and Liberty has indicated that they plan to convert from 1st January 2007.  However, for new ventures the AITC believes that UK REITs will compare unfavourably with offshore, London-listed investment companies that serve a similar purpose but with a lower regulatory burden.</p>' +
'<p class="news_txt">To compare REITs with JPUTs is difficult and sometimes unjust as often they fulfill very different roles.  For example, many property companies wish to remain in private hands yet may derive a number of advantages from adopting a fund structure.  There is, however, an interesting cross over evolving with the Channel Islands Stock Exchange (“CISX”) and UK REITs with CISX receiving a number of listing enquires.  Whilst often fiscally driven, the CISX listed REIT will comply with the UK regulatory requirements yet be outside the European Union, which may be very attractive for international investors.  If popular, this could prove a bilateral win for the growth of UK REITs and Jersey administrators of property funds.</p>' +
'<p class="news_txt">It seems that there is place for both the REIT and the JPUT.  The former is focused on existing main listed property companies and the UK resident investor who seeks to maximize his tax position, perhaps to compliment a personal investment or pension portfolio.  Non main exchange listed and private companies and funds, often with a foreign investor base or distributing fund status, will still find JPUTs most useful as will larger holding and investment entities that seek alternative tax efficient ways of holding UK property.</p>' +
'<p class="news_italic">Michael Farrow MSc FCIS TEP is a director and principal of Consortia Partnership Limited (www.consortia.je) a Jersey registered trust company</p>';

trust_law = '<p class="news_title">TRUSTS (AMENDMENT No. 4) (JERSEY) LAW 2006</p>' +
'<p class="news_txt">The latest amendments to the Trusts (Jersey) Law 1984 (the “Law”) came into effect on the 27<sup>th</sup> October 2006. They clarify existing provisions and remove others that have been accepted as no longer appropriate.</p>' +
'<p class="news_txt">The following are a summary of the most significant amendments:</p>' +
'<p class="news_inner_head">Settlor retained powers</p>' +
'<p class="news_txt">A settlor will now be able to retain certain powers without this affecting the validity of the trust. The powers that may be retained are set out in the law. A trustee who acts in accordance with the exercise of such powers will not be acting in breach of trust.</p>' +
'<p class="news_inner_head">Duration of a Jersey Trust</p>' +
'<p class="news_txt">A trust may now continue indefinitely unless the terms of the trust provide otherwise.</p>' +
'<p class="news_txt">Currently a trust has a maximum duration of 100 years unless it is a charitable trust.</p>' +
'<p class="news_inner_head">Extent of application of Jersey law to the creation of a trust</p>' +
'<p class="news_txt">Any questions as to the validity of a trust, the capacity of the settlor and the existence and extent of powers are to be determined in accordance with Jersey law and no foreign law rule shall affect such questions. This clarifies the position regarding the effect of foreign law on Jersey trusts, where for example a Jersey trust might otherwise be declared invalid under the laws of the country of the settlor’s domicile.</p>' +
'<p class="news_inner_head">Number of trustees</p>' +
'<p class="news_txt">There is clarification as to the number of trustees required for a trust, which is stated in the Law as one but is subject to the terms of the trust.</p>' +
'<p class="news_inner_head">Delegation</p>' +
'<p class="news_txt">An area of some concern for trustees in the past has been delegation and this is dealt with by an amendment which clarifies the position and allows trustees, subject to the terms of the trust, to delegate the execution or exercise of their trusts or powers and allows any delegate to further delegate such trusts or powers.</p>' +
'<p class="news_inner_head">Action by a trustee against a previous trustee</p>' +
'<p class="news_txt">This is now covered so that such actions founded on breach of trust must be brought within three years of the previous trustee ceasing to be a trustee.</p>' +
'<p class="news_inner_head">Liability of corporate directors</p>' +
'<p class="news_txt">Article 56 which provided for directors of Jersey corporate trustees to be liable as guarantors in the event of breach of trust by a corporate trustee is to be repealed. It is anticipated that this will make Jersey a more popular jurisdiction for family office arrangements, a common solution for which is a private trustee company.</p>' +
'<p class="news_inner_head">Charitable and non-charitable purpose trusts</p>' +
'<p class="news_txt">If the settlor’s intention can no longer be fulfilled, the Court has power to order the trust property to be held for other purposes consistent with the settlor’s original intention.</p>' +
'<p class="news_inner_head">Disclaimer of interest</p>' +
'<p class="news_txt">The disclaimer of beneficiaries’ interests will be simplified.</p>';

offshore_property_funds = '<p class="news_title">Offshore Property Funds</p>' +
'<p class="news_inner_head">Introduction</p>' +
'<p class="news_italic">&quot;Industry experts estimate that about £20bn of property assets have been moved offshore since the start of 2004. The vast majority is from investors in limited partnerships seeking to avoid new rules on stamp duty&quot;.<sup>1</sup></p>' +
'<p class="news_txt">Whilst there has been a significant increase over the last three years in Jersey Property Unit Trusts (&quot;JPUT&quot;) investing into UK situs assets, the recent removal of a key tax concession does not seem to have stemmed the tide.  On 22nd March 2006, the UK Chancellor announced that transfers of real property to offshore unit trusts would henceforth attract Stamp Duty Land Tax (“SDLT”).  Up to that point JPUTs were exempt SDLT which is levied at 4% on property with a market value in excess of £500,000.  Whilst momentum will partly explain continued growth, there are a number of other factors which help to maintain activity:</p>' +
'<ul>' +
'<p><li class="news_txt">A variety of offshore fund structures cater for size, complexity and geographic spread.</li></p>' +
'<p><li class="news_txt">The wider provision of Expert Funds has allowed more jurisdictions to provide streamlined funds’ services to sophisticated investors.  Jersey first accepted these funds in February 2004 and has since enjoyed a strong take up.</li></p>' +
'<p><li class="news_txt">Quality and breadth of services being offered by the best offshore jurisdictions.  General acceptance by governments and international quangos that offshore finance has an important role to play.</li></p>' +
'</ul>' +
'<p class="news_inner_head">Choice of Fund</p>' +
'<ul>' +
'<p><li class="news_txt"><span class="news_inner_head">Unit Trust.</span>  An offshore trustee holds unitised assets for a beneficiary under a written legal agreement.  The unit trust may be established with or without a manager; however, it remains the trustee’s responsibility to ensure the timely and accurate administration of the fund.  A unit trust based on real estate will invariably have a property manager whose duty it is to maintain the real estate, deal with tenants and, often, develop the assets.  This role normally befalls a professional based in close proximity to the assets.  So long as the income is attributed as it arises and paid according to the mandate, to the unit holders and does not form part of the trust fund, it should qualify as tax transparent for UK purposes.  Further, if the trustee is offshore and the trust is managed and controlled from offshore then the trust should avoid capital gains tax on disposal of the underlying assets.  Albeit subject to local tax concessions, an investor into the fund from outside Jersey will receive income gross.</li></p>' +
'<p><li class="news_txt"><span class="news_inner_head">Jersey Property Unit Trusts.</span>  Although SDLT concessions have been removed the structure is well known and understood by investors, professionals and intermediaries.  This knowledge makes their establishment easier and cheaper.</li></p>' +
'<p><li class="news_txt"><span class="news_inner_head">Expert Funds.</span>  The purpose of an expert fund is to shift the investment risk from the manager to the investor.  To do this equitably, the investor has to self certificate that they are knowledgeable and capable of carrying the risk of the investment.  The criteria of a sophisticated investor cater for this by stipulating a requirement for a minimum US$100,000 investment or having a net worth of $1m, excluding their residence, or those persons deemed experts by way of their business occupation.  A Jersey expert fund needs to have at least two Jersey resident directors and if close ended, the trustee and administrator can be one and the same.</li></p>' +
'<p><li class="news_txt"><span class="news_inner_head">Other funds.</span>  There are other funds available which vary in weight of regulation dependent, primarily, on size and risk.  Unlisted funds with under 50 investors can be set up and regulated under the Control of Borrowing (Jersey) Order 1958 (“<b>COBO</b>”)<sup>2</sup>.  The fund will have to have its offer documents approved by the Regulator and maintain at least two Jersey resident directors.  Larger funds may also be established and will be regulated by the Collective Investment Funds (Jersey) Law 1988 (“CIF”)<sup>3</sup>.  These funds are deemed <b>unclassified</b> and may be either closed or open ended.  Also authorised under the CIF Law, <b>recognised</b> funds aim to provide the same investor protection as afforded to UK investors and as such, may be afforded recognition by the FSA and may be marketed more widely.  All CIF funds will require a full prospectus and comprehensive preparation from all aspects.</li></p>' +
'<p><li class="news_txt"><span class="news_inner_head">Limited Partnerships.</span>  (See COBO funds)  Widely known around the world, limited partnerships<sup>2</sup> have one or more general partners with unlimited liability and any number of limited partners who tend to be passive investors.  The structure is relatively simple and provides for similar UK tax advantages to offshore unit trusts, i.e. non-resident investors being fiscally transparent.  Limited partners retain a proportional stake in the underlying assets which allows for double taxation treaty relief where applicable.  Details of limited partners may remain confidential and do not require filing, as may the terms of the investment.</li></p>' +
'</ul>' +
'<p class="news_inner_head">Choice of Jurisdiction</p>' +
'<p class="news_txt">Jersey has an offshore regulatory regime second to none.  The activities of professional trustees and fund managers are controlled by the Jersey Financial Services Commission.  The standards of regulation have a worldwide reputation of excellence.  Investor protection and complaint procedures are well developed and independent (see <a href="http://www.jerseyfsc.org">www.jerseyfsc.org</a>).</p>' +  
'<p class="news_inner_head">Choice of Trustee / Manager</p>' +
'<p class="news_txt">When choosing where and with whom to establish a new fund, size of the prospective fund and location of investors and assets are important factors.  However, just as critical is the service provided by the offshore trustee or administrator.  Often an administrator will offer directorship services.  It is important that any promoter ensures that the offshore directors are both qualified and experienced in matters of both offshore administration and real estate investment.  Critical to the offshore status of a company or fund is that it is managed and controlled offshore<sup>5</sup>.  Having directors competent to make relevant decisions will be most important to any defence of offshore status.<sup>6</sup>  It should also be noted that regulations were changed in 2004 to provide for Jersey based functionaries to administer non-domiciled funds.</p>' +
'<p class="news_italic">Michael Farrow MSc FCIS TEP is a Director of Consortia Partnership Limited, a Jersey regulated provider of trust services.</p>' +
'<p class="news_txt"><b>This document provides a general description of Jersey based property funds and is not authoritative.  Professional advice should be sought prior to any commitment.</b></p>' +
'<hr size="1">' +
'<p class="news_footer"><sup>1</sup> Daily Telegraph / Business Telegraph, 30 January 2005<br>' +
'<sup>2</sup> Available at: <a href="http://www.jerseylegalinfo.je/Law/LawsInForce/byAlpha/B/default.asp?URL=5-1947.htm">http://www.jerseylegalinfo.je/Law/LawsInForce/byAlpha/B/default.asp?URL=5-1947.htm</a><br>' +
'<sup>3</sup> Available at: <a href="http://www.jerseylegalinfo.je/Law/LawsInForce/byAlpha/c/default.asp?URL=6-1988.htm">http://www.jerseylegalinfo.je/Law/LawsInForce/byAlpha/c/default.asp?URL=6-1988.htm</a><br>' +
'<sup>4</sup> Available at: <a href="http://www.jerseyfsc.org/registry/registry_guidancenotes_limitedpartnerships.html">http://www.jerseyfsc.org/registry/registry_guidancenotes_limitedpartnerships.html</a><br>' +
'<sup>5</sup> <a href="http://www.justcite.com/jlink.aspx?link=[1906] AC 455">De Beers Consolidated Mines Ltd v Howe [1906] AC 455, 458,</a> that "a company resides for purposes of income tax where its real business is carried on where the central control and management actually abides".<br />' + 
'<sup>6</sup> Wood and another v Holden (Inspector of Taxes) [2006] EWCA Civ 26</p>';

employee_benefit_trusts = '<p class="news_title">Offshore Employee Benefit Trusts (“EBTs”)</p>' +
'<p class="news_txt"><span class="news_inner_head">What is an EBT?</span>  An EBT, whilst not having a strict legal definition, is a discretionary trust through which benefits of employment are indirectly provided by an employer to employees.  Normally in the form of shares in the employer company, the shares are placed in the hands of independent trustees for eventual distribution to employees or ex employees.  Benefits may also be in cash and invested in a variety of ways, including funds.</p>' +
'<p class="news_txt"><span class="news_inner_head">Why have an EBT from the UK perspective?</span>  In the UK, the Inland Revenue (the “Revenue”) defines EBTs in two categories: approved and unapproved trusts.  The latter are more flexible and whilst not enjoying certain tax advantages, nevertheless are the ones most commonly created offshore.  Factors for establishing an EBT include:</p>' +
'<ul>' +
'<li><p class="news_txt"><span class="news_inner_head">Motivation.</span>  An EBT is used to motivate by reward and to retain key employees.  With an unapproved scheme, the company contribution levels should be linked to corporate performance and the eventual share value left unfixed<sup>1</sup>.  It should be noted that share options attract different tax treatment to fully paid up shares, which is discussed later.</p></li>' +
'<li><p class="news_txt"><span class="news_inner_head">Flexibility.</span>  An unapproved EBT may contain a wide range of assets, which can be added to.  Money can sometimes be made available to employees and directors and, subject to conditions, a tax charge can sometimes be avoided.  An unapproved scheme may have disproportionate employee benefits granted at the discretion of the trustees, albeit guided by the trust deed<sup>2</sup>.</p></li>' +
'<li><p class="news_txt"><span class="news_inner_head">Asset Protection.</span>  A trust, by definition, is not the legal possession of the settlor; which, with an EBT, is the employer.  The advantage of this to the beneficiary, the employee, is that the EBT will be protected in a similar fashion to a company pension scheme.  This should protect employees from an unforeseen change or complication in their relationship with the employer and prevent the employer abusing the assets in trust.</p></li>' +
'<li><p class="news_txt"><span class="news_inner_head">Create a market.</span>  An EBT creates a quasi market in shares of an unlisted company.  Further, the trustees, being the holders of the undistributed shares, should be well disposed to the company.  Note should be taken that if the donor company is listed then Listing Rules require, inter alia, prior shareholder approval.</p></li>' +
'<li><p class="news_txt"><span class="news_inner_head">Tax Advantages.</span>  A statutory Corporation Tax (“CT”) deduction on the cost of providing shares for employee share schemes was introduced to further encourage employee share ownership.  However, the contributor’s CT deduction will be deferred until a payment is made out of the EBT in a form that gives rise to a liability to Income Tax (“IT”) and national insurance. This legislation does not adversely affect companies contributing to trusts that qualify for relief under the statutory CT deduction for employee share schemes.  Due to the Revenue’s acceptance of the current accounting treatment of EBTs, that whilst the shares are held by the trustee, the employer retains the risk of failure of the share price.  This means that by effectively consolidating the EBT and company accounts, the timing of the CT deduction may be affected.</p>' +
'<p class="news_txt">For payments made by the employer to the trust to be allowable against tax, they must be income in nature and wholly and exclusively for the purpose of the trade.  This is a strict definition and the Revenue will, for example, normally disallow contributions which are contractual rather than linked to the success of the trade.  If trustees of an unapproved scheme distribute shares to employees, the latter will normally be liable to IT on the market value, which will also form the base cost of the shares for Capital Gains Tax (“CGT”) purposes.  Trustees may be liable for the CGT on the difference between market value on the date of distribution and the base cost.  When options are issued to trustees, CGT relief may not be granted as the employee will not be taxable on the full market value of the share.   The Revenue will not apply CGT if IT has already been charged, thus avoiding double tax.</p>' +
'<p class="news_txt">To possibly mitigate CGT, EBTs are often established offshore as the normal disposal rules attached to offshore owners of shares should apply so long as the arrangements with the trustees are genuinely commercial<sup>3</sup>.  Holdover relief may be available to the transferor company on placing the shares into an offshore EBT.  Care needs to taken with Inheritance Tax and to have a sufficiently wide class of beneficiaries to avoid a possible ten year charge and an exit charge when capital is distributed.</p></li>' +
'<li><p class="news_txt"><span class="news_inner_head">National Insurance Contributions (“NIC”).</span>  EBTs are not an effective shelter against NICs for resident employees.  There is, however, no liability for non resident employees and rules for the self employed are dealt with in IR35<sup>4</sup> although, in the main, UK resident self employed are subject to NIC.  However, there are planning opportunities when employees are internationally based.</p></li>' +
'</ul>' +
'<p class="news_txt"><span class="news_inner_head">What type of EBT?</span>  There are many types of arrangement to hold shares and other incentives in trust, e.g.:</p>' +
'<ul>' +
'<li class="news_txt">Executive [and all-employee] Share Option Plans (“ESOPS”)</li>' +
'<li class="news_txt">Long Term Incentive Plans</li>' +
'<li class="news_txt">Deferred, Restricted and other Share Bonus Plans</li>' +
'<li class="news_txt">Phantom Plans and Stock Appreciation Rights</li>' +
'<li class="news_txt">International Profit Sharing Plans</li>' +
'</ul>' +
'<p class="news_txt">It is necessary to select the correct structure for the prevailing situation and to seek professional advice from a number of sources.</p>' +
'<p class="news_txt"><span class="news_inner_head">Why Consortia Partnership Limited (“Consortia”)?</span>  Consortia has an active, proficient and experienced Board of Directors and prides itself on timely and direct communication with clients.  This personal service is cost efficient and helps to tailor the EBT to the specific needs of the client company.  Consortia’s directors have a wide choice of professional advisers with whom they have previously worked.  Being entirely independent, Consortia has no conflicts of interest with external wealth managers and utilises independent performance benchmarking of assets under trusteeship.</p>' +
'<p class="news_italic">Michael Farrow MSc FCIS TEP is a Director of Consortia Partnership Limited, a Jersey regulated provider of trust services.</p>' +
'<p class="news_italic">This briefing is not authoritative and is provided for general information.  Expert advice should be sought before establishing an offshore EBT.</p>' +
'<p class="news_italic">April 2005</p>' +
'<hr size="1">' +
'<p class="news_footer">' +
'<sup>1</sup> Approved schemes require that the target [share price if listed] is fixed at commencement.<br>' +
'<sup>2</sup> Inheritance Tax Act, 1984, s.84 requires that “all or most” of the employees must be within the scheme to avoid being deemed transfers of value for IHT purposes.<br>' +
'<sup>3</sup> Taxation of Chargeable Gains Act, 1992, ss. 86 & 87<br>' +
'<sup>4</sup> IR35 Rules available at: <a href="http://www.hmrc.gov.uk/ir35/">http://www.hmrc.gov.uk/ir35/</a> Accessed on: 25 April 2005<br>' +
'</p>';

mediation = '<p class="news_title">Mediation – a practical method of solving disputes</p>' +
'<p class="news_italic">Mediation is a method of resolving disputes without recourse to the courts.  The process is swift and relatively inexpensive, leaving a good chance of saving the relationship between the conflicting parties.</p>' +
'<p class="news_txt">It is broadly accepted that the business world is becoming more litigious and, commonly, adversarial action is preferred to compromise.  The win or lose mentality must, by its very nature, produce an unsatisfactory outcome for 50% of the parties involved.  In itself this is potentially damaging to commercial relationships, especially in the close proximity of the financial services’ industry and, in the case of Jersey, an island community.</p>' +
'<p class="news_txt">Alternative Dispute Resolution (“ADR”) is now commonplace within the English legal system and the Jersey Royal Court is clearly in favour of its use in appropriate situations.  The Bailiff is quoted<sup>1</sup> , “On 8th June 2004 the Royal Court made a rule which has great potential significance to the resolution of disputes in Jersey.  The Royal Court (Amendment No 20) Rules empower the Court to direct that proceedings be stayed for such period as the Court thinks fit to enable the parties to try to settle the dispute by Alternative Dispute Resolution, i.e. mediation.  Where the Court has stayed an action so that it can be referred to mediation, the Court is entitled to expect that proper and diligent efforts will be made to resolve the dispute in that way.”</p>' +
'<p class="news_txt">Mediation is appropriate for most types of dispute but does not deny anyone the right to seek recourse to the full legal process.  However, it can avoid the costs and adversarial nature of formal court proceedings as well as provide a much speedier and less stressful resolution.  Mediation may also be appropriate for taking forward negotiations which have got stalled on contentious issues.</p>' +
'<p class="news_txt">Mediation may be appropriate for a wide spectrum of commercial disputes, including financial services, real estate, banking, breach of agreement and so on.  While it is available at any stage of a developing conflict, the earlier mediation is introduced, the more effective.  Entrenched positions create friction between parties that has to be eased before progress may be made.</p>' +
'<p class="news_txt">Mediation is not to be confused with arbitration, which is normally agreed to when parties enter into contract and is most appropriate for situations where there is a fixed or measurable result.  Unlike litigation or arbitration, mediation focuses on a mutually acceptable course of action or result and avoids making a judgment on the historic rights or wrongs of the case.</p>' +
'<p class="news_txt">For example, trust services provide a number of areas suitable for ADR.  Whilst not wishing to provide a definition, a trust is formed when a person (the Settlor) places assets in the hands of another (the Trustee) to deal with those assets (the Trust Fund) in the manner in which a prudent and skilled person would for the benefit of others (the Beneficiaries).  It is natural for a settlor, especially if he is an entrepreneurial individual, who may have built up the settled funds, to believe that he can outperform the trustee in the management of those assets.  Not only may the settlor become aggrieved with the efforts of the trustee, he, or indeed beneficiaries, may feel that trustees are not performing their duties competently or economically.  In this case, mediation may create the forum in which both sides can find a compromise yet keep the commercial relationship intact.</p>' +
'<p class="news_txt">In a recent case with which we were involved, a three day mediation addressed a multi million pound shareholder dispute.  The parties and their external professional advisers were able to reach an agreed settlement without recourse to levels of disclosure associated with the courts and the cost of a three day mediation dwarfs into insignificance the expense of a lengthy court procedure.</p>' +
'<p class="news_inner_head">Procedure</p>' +
'<p class="news_txt">Mediation is a voluntary, without prejudice procedure and is non-binding, up to the point of written agreement, which should be reached by the end of the procedure.</p>' +
'<p class="news_txt">The mediation will normally be held at a neutral and convenient location.  It commences with a joint meeting where each disputing party will have an opportunity to state its position.  This will normally be from a prepared statement which will have been given to the mediator in advance.  The parties will then retire to their own rooms and the mediator will go between, conveying each others’ position, until such time as an agreement is met.  The mediator will be non judgemental and is there to facilitate and guide the discussions which will be completely confidential.  The mediator will only release information to the other side when specifically authorised to do so.</p>' +
'<p class="news_inner_head">Costs</p>' +
'<p class="news_txt">The cost of the mediation will depend on its duration and the quantum of the assets in dispute.  Most mediations occur within one day and the cost is normally shared equally between both parties.  As a guideline, the mediator’s time is normally charged at finance industry professional rates, whilst a premium may be added for cases involving large amounts to offset the risk and professional indemnity costs.  Included in this cost is factored sufficient time for the mediator to read and prepare for a standard case file.</p>' +
'<p class="news_inner_head">Summary</p>' +
'<p class="news_txt">Mediation allows for saving face and because no solution is imposed on either party, stands a good chance of retaining the relationship yet providing a speedy, pragmatic and cheaper solution.</p>' +
'<p class="news_italic">Michael Farrow MSc FCIS TEP is a Director of Consortia Partnership Limited, a Jersey regulated provider of trust services and is an accredited mediator.</p>' +
'<p class="news_italic">February 2005</p>' +
'<hr size="1">' +
'<p class="news_footer"><sup>1</sup> Bailiff’s Speech at Assise d’Heritage 9th September 2004. Available at: <a href="http://www.jerseylegalinfo.je/Mediation/Reports/Assise_Speech(mediation).ASP">http://www.jerseylegalinfo.je/Mediation/Reports/Assise_Speech(mediation).ASP</a></p>';

governance = '<p class="news_title">Governance and the Small Business</p>' +
'<p class="news_italic">Talk today is of directors’ pay, stakeholders’ rights, social responsibility and so on but how relevant is this to a smaller, perhaps owner managed, business?  Having ploughed through Cadbury, Greenbury, Hampel and Higgs, one could conclude that small business can mainly ignore the complex, and therefore expensive, advice contained in these reports.  However, things are not so simple...</p>' +
'<p class="news_txt"><span class="news_inner_head">Independent Directors.</span>  Appointing a majority of independent directors to a smaller company Board is not realistic.  The cost and loss of control would be unacceptable.  Rather than dismiss this advice as utopian, it is possible to draw some constructive conclusions.  Non-executive directors are not a luxury; they should at least provide external verification that the ' +
'Board is operating to the optimum and that compliance issues are being tackled.  Often seen as the corporate conscience, the independent director needs the strength of character, knowledge and experience to guide the Board executives.  A little lateral thinking can reduce the immediate cost of appointing independent directors; many are prepared to accept a small amount of equity or defer their fees until the business can sustain them.  All good non-executives are pleased to pass on their experience to a Board which is willing to listen and react.' +
'  There is nothing wrong with using a non-executive’s commercial network if he or she is prepared to share it.  The choice of non-executive should be guided by matching their qualities to the needs of the business, rather than what doors they can open.  It should be the aspiration of any business to have at least one high calibre non-executive.</p>' +
'<p class="news_txt"><span class="news_inner_head">Remuneration and Nomination Committees.</span>  Committees are sometimes attributed with a race horse design and a camel outcome but independent committees do have an important role.  The need to make fair and unbiased senior appointments, and then to reward the appointees equitably, is essential for the success of the business.  Remuneration of Board members is important to retain' +
' the right calibre director; however, excessive awards will create stakeholder friction.  For example, shareholders may feel deprived of dividend income or employees’ morale is likely to suffer if the Board takes a much greater percentage uplift in pay than theirs.   Levels of pay should be sustainable and not perceived as the few at the top stripping out the value of the enterprise.  This is not to say that, with adequate justification, the Remuneration Committee can not recommend substantial payments so long as the decision is taken in terms of value for money.' +
'   If the enterprise is not large enough to carry the expense of a number of external directors, impartiality can be created by outsourcing.  Benchmarking is available from a number of independent sources and, if preferred, an independent person, or better, a small group, can be co-opted to form an ad hoc Remuneration Committee.  This is also true for directors’ nominations.  To avoid accusations of favouritism, or perhaps nepotism, appointments to the Board require scrutiny beyond the immediate Board.  Not only is this commercial good sense, it prevents a dysfunctional Board developing, often centred on an all powerful Chief Executive or Chairman.</p>' +
'<p class="news_txt"><span class="news_inner_head">Internal Controls.</span>  In the financial services’ industry most businesses have a regulatory requirement for external audit.  Clearly, internal measures can support the work of external professionals and give greater certainty to the Board that all is well on a daily basis.  It would be a director’s nightmare to have the external auditor seek an emergency meeting with the Board in the midst of the annual audit.' +
'  Whether compliance is compartmentalised, or included in the standard duties of all operational staff, is a management decision.  What is not at question, however, is need to develop staff awareness and provide the requisite training.  Whistleblowers of late have hit the headlines.  Of the recent, well known corporate debacles in the US, the principal discoverers were internal audit and compliance middle management.  A small business will not normally have these functions established independently.  These responsibilities must be allocated to executives but assistance may be gained from external specialists, who can be hired either as a one off exercise or to supplement internal procedures.</p>' +
'<p class="news_txt"><span class="news_inner_head">External Relationships.</span>  The Combined Code considers stakeholder relationships, the most important possibly being with shareholders.  This is not normally an issue for the owner manager and even if it is, the issues tend to be within families.  Other stakeholders should not be dismissed.  Firstly, employees are often ready to vote with their feet if ignored.  Care for employees goes beyond pay and, whilst not recommending an overly paternal approach, working relationships may be enhanced through collaboration.  Employees should be encouraged to make the most of their talents both for the benefit of the company and themselves.  Also a collaborative approach with suppliers will create loyalty and drive better product.</p>' +
'<p class="news_txt"><span class="news_inner_head">Disclosure and Transparency.</span>  Sometimes an anathema to small business, openness can encourage activity rather than give away commercial advantage.  By being transparent with policies, especially pricing, trust and understanding will be built with clients.  Active communication is the key to success.  For example, innovative use of the internet and intranets can inform employees, clients and suppliers alike in a relatively inexpensive way.</p>' +
'<p class="news_txt">In summary, good governance, and therefore good business, is essentially a matter of ethics and morals.  However, many businesses would benefit from a review of their structure, procedures and responsibilities and possibly follow on assistance.   This may best be guided by experienced people, empathetic with the Board and up to date with current best practice.</p>' +
'<p class="news_italic">Michael Farrow MSc FCIS TEP is a Director of Consortia Partnership Limited, a Jersey regulated provider of trust services.  Consortia specialises in advising on matters of corporate governance.</p>' +
'<p class="news_italic">March 2005</p>';

eu_savings = '<p class="news_title">EUROPEAN SAVINGS TAX DIRECTIVE – AS IT AFFECTS PERSONS INVESTING THROUGH JERSEY</p>' +
'<p class="news_inner_head">Introduction</p>' +
'<p class="news_txt">This briefing has been written primarily for individuals who are resident for tax purposes in an European Union (EU) Member State and who personally receive bank interest or certain other types of “savings income” from a bank or other financial services provider located in the EU and certain other onshore and offshore jurisdictions. </p>' +
'<p class="news_txt">Customers of Jersey financial services providers who are not resident for tax purposes in an EU Member State are unlikely to be affected by the information contained in this briefing.</p>' +
'<p class="news_title">A. THE EUROPEAN SAVINGS TAX DIRECTIVE</p>' +
'<p class="news_inner_head">What is the European Savings Tax Directive (ESD)?</p>' +
'<p class="news_txt">The ESD is an agreement between the Member States of the (EU) to automatically exchange information with each other about EU tax resident individuals who earn <strong>savings income</strong> in one EU Member State but reside in another (the <strong>automatic exchange of information option</strong>).</p>' +
'<p class="news_txt">Three EU Member States (Austria, Belgium and Luxembourg) have opted to apply alternative arrangements during a transitional period.  Under these arrangements, tax will be deducted at source from income earned by EU resident individuals on savings held in other EU countries (<strong>the withholding tax option</strong>).</p>' +
'<p class="news_txt">Under the Directive, jurisdictions implementing the withholding tax option are also required to provide one or both of the following procedures to allow individuals to request that no tax be withheld where:</p>' +
'<ul>' +
'	<li class="news_txt">An individual customer expressly authorises their financial services provider to report information to the local tax authority for onward transmission to the tax authority of the customer’s EU Member State of residence; and/or</li><br>' +
'	<li class="news_txt">An individual customer presents acceptable evidence to their financial services provider that they are not subject to tax in the EU.</li>' +
'</ul>' +
'<p class="news_inner_head">What ‘savings income’ is caught under the Directive?</p>' +
'<p class="news_txt">Savings income is essentially interest earned on bank deposits, interest from and proceeds on the sale or redemption of certain bonds and income from certain types of investment funds (principally open-ended money market retail funds).  Most other types of income (for example, dividends on ordinary or preference shares of companies, salary, pension, annuity and insurance payments) fall outside the definition and are therefore outside the scope of the ESD. Savings income arising within a Trust or Company, also fall outside the scope of the ESD.</p>' +
'<p class="news_inner_head">When does the ESD take effect?</p>' +
'<p class="news_txt">The ESD is currently expected to come into force on 1st July 2005.  This is subject to certain preconditions having been met by that date, which are designed to ensure that a ‘level playing field’ is established for those countries and territories affected.</p>' +
'<p class="news_title">B. THE POSITION IN JERSEY</p>' +
'<p class="news_inner_head">Why and how does the ESD affect accounts in Jersey?</p>' +
'<p class="news_txt">Although not part of the EU, the three UK Crown Dependencies (Jersey, Guernsey and the Isle of Man), in common with a number of other jurisdictions, have voluntarily agreed to apply the same measures to those in the ESD and have elected to implement the withholding tax option.  This will be known as the “retention tax option” within the Crown Dependencies.  The bilateral agreements entered into by each Crown Dependency with the EU Member States also provide for both of the alternative options described above.</p>' +
'<p class="news_inner_head">How will the retention tax option work?</p>' +
'<p class="news_txt">Under the retention tax option, each financial services provider will automatically deduct tax from interest and other savings income paid to EU resident individuals.  The majority of this tax will then be remitted annually, via the local domestic tax authority, to the various tax authorities within the EU Member States on an aggregate basis.</p>' +
'<p class="news_inner_head">Under the retention tax option, financial services providers will therefore make a bulk interest payment but will not disclose personal details in respect of any individual customer.</p>' +
'<p class="news_txt">The rate of retention tax will be 15% from 1st July 2005, 20% from 1st July 2008 rising to 35% from 1st July 2011.</p>' +
'<p class="news_inner_head">What if an individual customer elects for exchange of information?</p>' +
'<p class="news_txt">It is likely that financial service providers will give the option to elect for exchange of information instead of the retention tax.</p>' +
'<p class="news_txt">If a customer elects for the <strong>exchange of information option</strong> then no tax will be deducted from interest payments made.</p>' +
'<p class="news_txt">Instead, details of the customer’s identity and residence, the amount of savings income received and the period to which it relates, will be reported by their financial services provider to the relevant local tax authority of the EU Member State in which they are resident.</p>' +
'<p class="news_inner_head">Information exchange will only take place at the specific written request of individual customers.</p>' +
'<p class="news_inner_head">How do these changes affect Jersey’s customer confidentiality rules?</p>' +
'<p class="news_txt">Jersey has comprehensive data protection legislation and well-established common law principles concerning customer confidentiality.  These will not be affected by the introduction of the bilateral agreements the Island has entered into because the ‘default’ position in Jersey is the retention tax option, under which customer confidentiality is fully maintained.</p>' +
'<p class="news_italic">Consortia Partnership Limited is pleased to assist in advising clients on the applicability of this directive. </p>' +
'<p class="news_italic">May 2005</p>';

property_investment = '<p class="news_title">Investing in Real Estate</p>' +
'<p class="news_inner_head">Introduction</p>' +
'<p class="news_txt">Over the last few years, first world equity markets have suffered from uncertainty and poor performance.  Real estate has become an investment of choice and certainly may be considered the fourth asset class in most balanced portfolios.  Due to the cost of real estate, direct investment is only sensible when a portfolio is sufficiently large.  Indirect investment has had to contend with property companies trading at up to a 40% discount to Net Asset Value (“NAV”), fund managers’ fees and a potentially inefficient tax position.  New investment opportunities are on the horizon and, onshore, Real Estate Investment Trusts (“REITs”) are creating investor excitement whilst offshore, innovative fund structures are reducing the cost of entry and increasing choice.</p>' +
'<p class="news_inner_head">Indirect Investment</p>' +
'<p class="news_txt">The subject of offshore property funds has been addressed previously in these series of briefings.  An investor’s appetite for these types of fund will depend on many factors.  For example, the size and liquidity of the fund, its level of gearing, sector and geographical location of the underlying assets which can make significant difference to duration, risk and return on an investment.  Indirect investment tends to suit the smaller investor or one with a wide portfolio perhaps more interested in other asset classes.  Occasionally, investors have sufficient wealth and a desire to own property directly and below are a few issues with which they must contend.</p>' +
'<p class="news_inner_head">Direct Investment</p>' +
'<p class="news_txt">There are many motives for investing in property.  Historically, volatility in values has been relatively low, rental income has been predictable and UK real estate has enjoyed capital appreciation.   The predictability and stability have been attractive in balancing a portfolio of investments.  Not only are there positive technical features, there is a solidity and comfort about owning something as tangible as a building.</p>' +
'<p class="news_txt">If investing directly into real estate, it is necessary to consider the amount to be invested, duration and carried risk.  These factors often dictate the market sector that may be invested in.  For most, this is the buy-to-let residential market but for those with greater resources then commercial, such as retail, office, leisure or industrial, property may be possible.  Residential property tends to suffer from shorter leases, lower quality covenants and sometimes problem tenants, exacerbated by recent indicators of much lower growth in value.</p>' +
'<p class="news_txt">There a number of financing options:</p>' +
'<ul>' +
'	<li><p class="news_txt"><span class="news_inner_head">Equity.</span>  With virtually any acquisition a degree of equity will be needed.  A typical loan to value will require the owner to put up around 25% of the value of the acquisition.</p></li>' +
'	<li><p class="news_txt"><span class="news_inner_head">Debt.</span>  Banks and building societies are the main providers of senior debt.  The lender will normally take security over the asset to be acquired and may look to other security if the asset is of a risky nature.  This form of debt tends to be the cheapest borrowing and may be either fixed or linked to base rate.</p></li>' +
'	<li><p class="news_txt"><span class="news_inner_head">Mezzanine.</span>  When a large investment is required, especially for commercial property, and the owner either has insufficient equity or does not wish to cede much share capital, it is possible to borrow with similar characteristics to equity.    This mezzanine debt can be geared with ordinary bank debt, in other words stand alongside the investor’s equity.  However, a lender will demand a high rate of interest and, perhaps, equity participation as reward for the additional risk.</p></li>' +
'</ul>' +
'<p class="news_inner_head">Offshore Owners</p>' +
'<p class="news_txt">There are tax advantages for non-resident owners of UK situs property.  This is a complex area of planning and the Revenue has a raft of anti-avoidance case law and statute to lean on and so expert tax advice must be sought.</p>' +
'<p class="news_txt">This briefing note does not deal with the position of a property trader, who is likely to have a permanent establishment in the UK and may be liable to corporation tax, although should enjoy various development and construction reliefs.  If the property is owned by an offshore trust then the residential status of the settlor or UK resident beneficiary is important.</p>' +
'<ul>' +
'	<li><p class="news_txt"><span class="news_inner_head">Income Tax.</span>  Income from UK land and buildings is usually considered investment income.  Non-resident landlords can apply to the Revenue’s Centre for Non-Residents for rental income to be paid gross and the landlord subsequently account to the Revenue for the appropriate tax.  Alternatively, the UK tenant or agent should deduct tax on rent at the basic rate, net of allowable expenses, and give the offshore owner an annual certificate of the tax deducted.  Non-residents should also consider any double taxation agreement with their country of residence so as to avoid any unnecessary tax being paid.  It may also be possible to mitigate the tax liability on rental income by appropriate borrowing.</p></li>' +
'	<li><p class="news_txt"><span class="news_inner_head">Capital Gains Tax (“CGT”).</span>  Offshore investors should avoid a CGT liability as non-residents are not normally charged on disposals.  Owners who have recently departed the UK to change residence may still claim Principal Private Residence (“PPR”) relief.</p></li>' +
'	<li><p class="news_txt"><span class="news_inner_head">Inheritance Tax (“IHT”).</span>  UK real property is not treated differently to other bequeathed assets.  However, property located elsewhere, especially civil law jurisdictions, may be governed by forced heirship and succession rules.  UK property owned by an offshore company will not usually be regarded as a UK situs asset.</p></li>' +
'	<li><p class="news_txt"><span class="news_inner_head">Stamp Duty.</span>  There are a number of SDLT mitigation schemes but most are complex and may not justify a potential saving on the maximum of 4% tax liability on property and land over £500,000.</p></li>' +
'</ul>' +
'<p class="news_inner_head">Exit Strategy</p>' +
'<p class="news_txt">A wise investor will consider exit options before making an investment.  Real estate tends to move in cycles which tend to match the Keynesian economic cycle and are often countercyclical to the equity markets.  A key feature of commercial lets is the quality of the tenant’s covenant; when a retailer’s performance suffers this is reflected in the value of landlord’s tenancy agreement.  Thus the best quality commercial tenants will command a premium.</p>' +
'<p class="news_txt">Due to complexity of sale and the matched nature of dealing, a quick exit from real estate will not normally achieve full value.  An exit strategy needs flexibility and should try to match the possible liquidity requirements of the investor.  Flexibility may be gained from the outset by holding the UK property in an offshore company.  This will cater for either a sale of the underlying asset or a disposal of the offshore company.  Much relies on the investor’s network of possible buyers and professional intermediaries.</p>' +
'<p class="news_inner_head">Summary</p>' +
'<p class="news_txt">With good returns from stocks and bonds, many ignored direct investment into property due to its illiquidity, conservative returns and lack of diversity, except with a very large portfolio.  Perversely, the recent attraction of real estate has been partly created by this stability of returns during the equity and corporate bond downturn.  Direct investment is not for the faint-hearted but if seeking a long term investment, especially within an offshore corporate or trust structure, property holds some most attractive features.</p>' +
'<br />' +
'<p class="news_italic">Michael Farrow MSc FCIS TEP is a Director of Consortia Partnership Limited, a Jersey regulated provider of trust services.</p>' +
'<p class="news_italic">June 2005</p>' +
'<p class="news_italic"><b>This document provides a general description of property investing from offshore and is not authoritative.  Professional advice should be sought prior to any commitment.</b></p>';

//newsletters end--------------------------------------------------------------------------------

//array of newsletter titles
tit_arr = new Array(
	"Carbon Funds",
	"JPUT vs REIT (Trust Estate)",
	"Trust Law (Amendment No. 4)",
	"Offshore Property Funds",
	"Employee Benefit Trusts",
	"Mediation",
	"Governance and the Small Business",
	"EU Savings Tax Directive",
	"Investing in Real Estate",
	"Family Office");

//array of newsletters
news_arr = new Array(
	carbon_funds,
	jput_vs_reit,
	trust_law,
	offshore_property_funds,
	employee_benefit_trusts,
	mediation, governance,
	eu_savings,
	property_investment,
	family_office);

function makeTable()
{
	//make drop down
	document.write("<tr><td><select id=\"news_selector\" onChange=\"showNewsletter();\">");
	
	for(x = 0; x < tit_arr.length; x++)
	{
		if(x == 0)
		{
			document.write("<option value=\"", x, "\" selected>", tit_arr[x], "</option>");
		}
		else
		{
			document.write("<option value=\"", x, "\">", tit_arr[x], "</option>");
		}
	}
	
	document.write("</select></td><td align=\"right\"><a href=\"#\" class=\"print\" onClick=\"printFriendly();\">Printer&nbsp;Friendy&nbsp;Version</a></td></tr>");
	
	//make text div
	document.write("<tr><td colspan=\"2\"><div class=\"txt_main_news\" id=\"newsletter\">", news_arr[0], "</div></td></tr>");
}

function showNewsletter()
{
	selectedId = document.getElementById('news_selector').options[document.getElementById('news_selector').selectedIndex].value;
		
	document.getElementById('newsletter').innerHTML = news_arr[selectedId];
}

function firstShowNewsletter()
{
	var url = window.location.href;
	
	//alert(url);
	
	var qparts = url.split("?");
	
	if (qparts.length > 1)
	{
		//alert(">> " + qparts[1].split("="));
		
		var briefing_num = (qparts[1].split("="))[1];
		
		//alert(">> " + briefing_num);
		
		document.getElementById('news_selector').selectedIndex = briefing_num;
		
		showNewsletter();
	}
}

var msgWindow = null;

function printFriendly()
{
   selectedId = document.getElementById('news_selector').options[document.getElementById('news_selector').selectedIndex].value;
   
   msgWindow = window.open("","displayWindow","menubar=yes, scrollbars=yes, toolbar=yes");
   msgWindow.document.write("<html><head><title>" + tit_arr[selectedId] + "</title><link href=\"css/consortia.css\" rel=\"stylesheet\" type=\"text/css\"></head>");
   msgWindow.document.write("<body><table><tr><td>", news_arr[selectedId], "</td></tr></table></body></html>");
}