How safe is my investment?
Like most investments, there are risks (see How it Works section), but part of the attraction of syndicated investment is that the risks are shared between all investors.
A syndicate has the advantage of owning the freehold of the property, so it is an ‘asset backed’ investment. The risks come from borrowing (interest rate rises), the tenant vacating the premises or going bust and any damage to the property itself.
Each of these are managed, or protected by LPS Ltd as the syndicate manager.
When do I get my income?
Once the tenant has taken occupancy, rent is paid quarterly and distributed quarterly (within a month or so) to investors.
If the syndicate is purchasing land and developing a building, there will be an initial period where there is no income, but as above, once occupied and the rent is being paid, investors will receive their distribution.
What’s the tax position on my income, or if I sell?
Income is distributed without tax deduction (gross) and therefore must be declared by investors to HMRC via their Self-Assessment return.
Upon sale, the proceeds are subject to Capital Gains Tax, which once again must be declared via individuals Self- Assessment return.
For SIPP or SSAS (pension) investments, no tax is due.
How can I sell my investment?
The sale of the property as whole, must be a decision of the majority of the members of the syndicate.
If an individual wants to sell their ‘share’ , the terms of the syndicate mean it is first offered to the remaining syndicate members and if no buyer comes forward, LPS Ltd will work with you to find an investor who is willing to buy into an operational syndicate.
I have a pension fund, can I invest that into a syndicate?
These types of investment are well suited to pension funds as they are a ‘permissable investment’ and they provide gross income and capital gains. Care needs to be taken as they are illiquid and so if immediate cash is needed, a syndicate is not ideal.
Can I send someone on my behalf to investor meetings?
Not generally, but it is accepted that there may be occasions when investor meeting dates clash with other commitments and so a ‘deputy or proxy’ could attend as an exception.