SDLTM24725 | Basic Conditions for Seeding Relief

The term ‘seeding’ refers to the transfer or acquisition of properties from an existing portfolio to a new or empty fund. Often new funds need to be ‘seeded’ to attract investment. A fund will also have a seeding period to build up a track record of performance in order to attract new investors.

To qualify for relief, all of the following conditions must be met:

Condition A: The purchaser of the properties must be a PAIF or CoCS;

Condition B: The main subject-matter of the transaction consists of a major interest in land;

Condition C: The only consideration for the transaction given to the vendor for the properties is units in the CoCS or in the PAIF; and

Condition D: The effective date of the transaction must be within the seeding period (See SDLTM24730 ).

Condition D will only be met for a RIF when an entry notice has been given in relation to the scheme on or before the effective date of the transaction.

The conditions are also subject to various restrictions. See SDLTM24730 onwards for more details.