As with any property investment, investors should make sure that investing in the CORUM SCPI is suitable to their financial position and investment objectives. The appropriate amount to invest in the CORUM SCPI depends on your personal financial position, investment horizon and appetite for the specific risks of real estate investments. Prior to any investment, you should read the information documents, in particular those related to the costs and risks of an SCPI investment. The value of your CORUM shares and any income generated from them may rise as well as fall depending on the situation of the real estate market and the rental terms of the properties. Of course, past performance is not a reliable indicator of future results. By purchasing CORUM shares, you are making a real estate investment: therefore, this is a long-term investment whose liquidity is limited and whose value and any income from it are not guaranteed.

Buying shares subject to a split of ownership

What is a split of ownership?

This often unknown investment technique is based on a simple principle: splitting the full ownership of an SCPI share between two rights: the right to use it (usufruct) and the ownership right (bare ownership) for a specific period of time of 3 to 20 years.

  • If you buy the usufruct of CORUM shares:
    • You will benefit from a discount on the purchase price,
    • You will receive dividends for your CORUM SCPI shares for the whole duration of the split of ownership.

 

  • If you prefer bare ownership:
    • You will benefit from a discount on the purchase price of the CORUM share,
    • You will not receive dividends for the duration of the split of ownership,
    • You will not increase your tax liability during the period of the split of ownership since you will not receive any income until the end of the period chosen initially.

As with any real estate investment, it may be difficult or even impossible to redeem or transfer CORUM shares subject to a split of ownership (usufruct or bare ownership). This is why we recommend that holders of shares subject to a split of ownership choose the duration of such split based on their personal situation and considering that they will hold on to their rights for the whole duration of the split.

Duration of the split of ownership  (in years) 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Bare ownership (in %) 86 82 78 74 71 68 65 63 62 61 60 59 58 57 56 55 54 53
Usufruct (in %) 14 18 22 26 29 32 35 37 38 39 40 41 42 43 44 45 46 47

 


 

Buying CORUM shares as a bare owner

By acquiring the bare ownership of CORUM SCPI shares, you obtain the right to fully own these shares at the end of the split of ownership.  

During the split (3 to 20 years), you do not receive any income, incur any costs or increase your tax liability. In return, you buy shares at a discount of 17% to 49% on the purchase price. The longer the duration of the split of ownership, the higher the discount.  

At the end of the split of ownership, you become the full owner of the shares again, automatically and free of charge, and you can decide to either sell your shares in order to realise a capital gain, if any, or to receive SCPI income. 

Tax treatment

For the whole duration of the split of ownership, you do not incur any additional income tax liability.
At the end of the split, you will regain full ownership of the shares and receive income that is subject to property income tax.
If you are liable for wealth tax, you may deduct the amount invested as a bare owner from your wealth tax base.

Why?

  • To achieve long-term capital growth instead of receiving recurring income.
  • To benefit from a discount on the purchase price of SCPI shares.
  • To help you reduce your tax liability if you are subject to high taxation.

The value of your CORUM shares and any income from them may rise as well as fall depending on the situation of the real estate market and the rental terms of the properties. Obviously, past performance is not a reliable indicator of future results.

Buying CORUM shares as a usufructuary

If you acquire the usufruct of SCPI shares, you will receive any income attached to them for the duration chosen initially, which can be 3 to 20 years.

Upon the purchase, the amount payable by you as a usufructuary is between 14% and 50% of the price payable for the full ownership of the shares. The longer the duration of the split, the longer you will receive dividends and the higher the portion of the acquisition price payable by you will be.

At the end of the split, usufruct automatically expires and you no longer receive any income. 

Tax treatment

In case of a tax deficit, any income received as a usufructuary can be used to offset it and to receive income that is already net of tax.
Companies may amortise the temporary usufruct of the SCPI shares. Any income received as a usufructuary will be subject to low taxation.
If you are liable for wealth tax, you should be aware that the amount to be included in your tax base will be the same as for the full ownership, not that of the usufruct.

Why?

To receive, for the whole duration of the split, a higher income than in the case of full ownership, but with a lower initial investment.
To benefit from a dividend yield higher than if you fully owned your CORUM shares.

 


 

Are you interested in buying shares subject to a split of ownership?
You can call a CORUM representative at 

+31 20 237 19 10

 


 

In case of a split of ownership, it may be difficult or even impossible to redeem or transfer shares. Holders of shares subject to a split of ownership are advised to hold on to their rights for the whole duration of the split.