Clavis Walden, a real estate boutique started earlier this year, will be the first to launch a new type of tax-efficient property fund that could draw substantial assets away from the UK’s biggest property funds.

The company has filed an application to launch a Property Authorised Investment Fund with the UK Financial Services Authority. Existing open-ended property funds pay tax on some income such as rent, which institutions are unable to claim back due to tax rules, but eligible investors in a PAIF will be able to claim back such tax and effectively increase their returns.