JPUT financings: security, structure and enforcement

A Jersey Property Unit Trust (JPUT) is a widely used structure for investing in UK commercial real estate, offering tax transparency, flexibility and a familiar framework for international investors, lenders and advisers.  

For lenders, understanding how security can be taken over JPUT units - and how enforcement works under the Security Interests (Jersey) Law 2012 - is essential when structuring acquisition or refinancing facilities.  

This article provides a practical guide for both borrowers and lenders undertaking JPUT‑based transactions. It outlines the key features of a JPUT, the benefits of using the structure and the main considerations when it comes to financing, security and enforcement.  

What is a Jersey Property Unit Trust?  

A JPUT is a type of Jersey trust which is often used to acquire and hold interests in, among other things, UK commercial real estate.  

A JPUT is not a separate legal entity. The assets of the JPUT are held by its trustee(s) (as the legal owner(s)) on trust for the unitholders of the JPUT (as the beneficial owners).  

A JPUT is formed on the execution of a trust instrument by a trustee and the transfer of the initial property to the trustee is held in accordance with the terms of the trust. In consideration for the client vesting property in the trust, the trustee will issue units in the JPUT to the client and enter the client's name in a register of unitholders. Each unit issued represents an undivided share of the underlying trust fund and carries the rights attaching to such unit as set out in the trust instrument. 

Find out more about how to establish a JPUT.  

What are the benefits of using a JPUT?

JPUTs are frequently used to acquire and hold interests in UK commercial real estate due to: 

• the ease with which a JPUT can be established 

• transparency for income tax (if established as a Baker Trust) 

• exemption from UK capital gains tax on the sale of units (provided that the register of unitholders is kept in Jersey and the JPUT qualifies as a "collective investment scheme" under UK law) 

• the ability to transfer underlying property free of any stamp duty or stamp duty land tax charges by structuring the transfer as a sale of units rather than as a conveyance of the underlying property 

These fiscal advantages, combined with the flexibility to tailor the terms of the trust instrument to meet commercial and operational requirements, are key to the JPUTs popularity and mean that it is a very familiar structure to principals, legal advisers, investors and lenders. 

Financing and security considerations 

A trustee, acting in its capacity as trustee of a JPUT, may enter into financing transactions and create legal, valid, binding and enforceable obligations.  

Jersey security is typically obtained over: 

• the units in the JPUT 

• any subordinated debt owed by the JPUT (acting by way of its trustee(s))  

• any Jersey bank account(s) held by the trustee(s) acting as trustee(s) of the trust 

A JPUT, acting through its trustee(s), can also grant foreign‑law security over any non‑Jersey assets it holds. 

UK lenders are very familiar with secured lending to JPUT structures, and Jersey law makes the process straightforward.  

Under the Security Interests (Jersey) Law 2012 (SIJL), units in a JPUT qualify as “investment securities”, meaning they can be charged in the same way as shares. The security package therefore looks and feels very similar, as lenders typically require executed blank unit transfer forms, original unit certificates and an annotated register of unitholders on completion. 

How to enforce security over JPUT units 

To enforce security over units of a JPUT, the secured party must follow the enforcement regime set out under the SIJL. The secured party may enforce its security by, among other things, appropriating or selling the units once: 

• a default under the security agreement has occurred  

• notice of the default has been given to the unitholders 

Prior to selling or appropriating the units, the SIJL requires the secured party to take all commercially reasonable steps to achieve fair market value at the time of enforcement. In practice, this is typically evidenced by obtaining one or more independent valuations.  

The SIJL also imposes notification requirements - before selling or appropriating the collateral, notice must be given to any parties with an interest in the collateral and, unless they have waived this right in the underlying security agreement, the debtor. 

Find out more about enforcement under the SIJL. 

Key considerations when financing a JPUT 

Due diligence

As with any corporate financing, full due diligence is essential. This includes reviewing the trustee’s constitutional documents, the trust instrument, and any Jersey regulatory consents. 

Trust instrument checks

The trust instrument must be examined for any restrictions on borrowing, guaranteeing, or granting security. Lenders may require targeted amendments to ensure it contains the same lender‑friendly protections expected in a share security scenario, adapted for units rather than shares. Board minutes and unitholder resolutions will also need to be obtained. 

Register of overseas entity

The register of overseas entities (ROE), established under the UK Economic Crime (Transparency and Enforcement) Act 2022, requires overseas entities that own UK land to register and disclose their beneficial owners to Companies House. Where a JPUT which holds UK real estate is considered an "overseas entity", typically because its trustees are corporate bodies incorporated outside the UK, the trust must comply with the ROE registration and ongoing disclosure obligations before it can buy, sell or transfer UK property interests.  

How Ogier can help 

As a market‑leading firm in Jersey real estate finance, Ogier has extensive experience advising on the establishment, financing and enforcement of JPUT structures. Our team regularly acts for major UK and international lenders, ensuring security packages are robust, SIJL‑compliant and aligned with commercial expectations. 

For further information on financing to JPUTs, contact the team.  

About Ogier

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice