Lee Nuttall
I lead both the real estate tax and the funds and structuring teams. In particular I advise on the implementation of a wide range of tax-driven property funds and joint ventures. I am also a member of the Institute for Fiscal Studies, the VAT Practitioners Group and the Investment Property Forum.
Tel: +44 (0)870 733 0584
Email: lee_nuttall@wragge.com
Services: Real Estate, Tax
Best brains in...
Structuring real estate funds to give them maximum efficiency for the whole universe of investors, VAT planning for mixed-use real estate schemes.
Highlight of your career so far?
Advising a professional services firm on setting up its first UK real estate fund (using its own seed capital) through a Jersey property unit trust; acquiring the fund's first properties; bringing in new investors; re-writing its constitutional documents as the fund grew in size and sophistication, to transform it into an 'institutional friendly' model.
Most challenging job you've ever done?
The most recent job for a major developer – a real Wragge & Co team effort, and a team effort with the client too. We were asked to devise a structure for a new, single property, non-retail real estate fund that was tax efficient for a whole range of investors (pension funds, UK corporate, sophisticated non-resident individuals, trust etc). The structure also had to provide for a promote fee.
We used a hybrid structure. Investors (a pension fund manager, a trust to cater for the non-UK resident investors and non-UK corporate) invested via a Jersey property unit trust. The trust became a founder partner in a UK limited partnership. The other limited partner was the client, taking its carried interest as a partnership interest.
The trust structure enables investors to sell on their units free of UK stamp duty land tax.
The real estate acquisition was not straightforward: we have taken a development agreement for (head) lease for a premium with overage (and a geared rent). Our client (as developer) was required to give limited guarantees.
The funding was complex. It was done in two parts – acquisition finance and development finance. The investors have given certain (limited) conditional guarantees to the bank and to the landlord. Their respective contributions were regulated by a contribution agreement. Some investors have made their investment commitments conditional on planning and dealing successfully with various rights of light issues.
Experts were drafted in from real estate, tax, finance and corporate to meet the challenge and exceed the expectations of clients. The whole firm really pulled together. The fund will continue to provide work throughout the firm – particularly to our planning and construction teams. At least one other investor is looking to join the party – possibly by taking an equity-sharing underlease.
Best example of a creative legal solution?
For a well-known high street retailer, we were selling a £30,000,000 store. The buyer would have faced an SDLT bill in the region of £1.4m. We changed the structure of the transaction to take advantage of a tax relief – and saved £1.4m. For the same retailer, we re-structured a deal as the grant of a lease and obtained corporation tax relief for the payment of the premium (which we would not have obtained had we done a straight freehold purchase).
When have you ever given a client a real competitive edge?
When bidding for a property, we were able to devise a structure for the transaction such that no SDLT was payable. This allowed the client to offer more for the acquisition by sharing part of the saving with the seller. In a competitive bid situation, this allowed the client to get the deal; and it very recently sold on its interest for a huge profit.
We act for a consortium of residential developers. They are planning significantly to extend and re-develop a town in the south of England. They are buying land from a whole array of different individual landowners with different personal tax circumstances. Following the proposals to change the CGT rules (including the abolition of taper relief) from April 2008 we devised a calculator that compared at a glance the individuals' CGT liabilities under the old rules with the new ones, making it easy for the clients to help a landowner to see whether the new rules made him better or worse off. This cut through the confusion caused by inaccurate and alarmist press reports of the impact of the changes.
What's your single greatest contribution to Wragge & Co's corporate responsibility?
I am chairman of the trustees of the Wragge & Co charitable trust, but my single greatest contribution came when I was 'shopped' to the senior partner by my wife for using the firm's lifts when I was being sponsored not to use them. The fine was large (and deserved).
What's been written or said about you that you're most proud of?
'His bright pink suit and cheeky grin made him the best and funniest Buttons in any school production of Cinderella I have ever seen' - my violin mistress/teacher, writing in the PTA report for my school in 1981!
