UK real estate investment trusts (REITs)—summary
Produced in partnership with Martin Shah of Simmons & Simmons and Charles Goddard of Rosetta Tax

The following Tax practice note produced in partnership with Martin Shah of Simmons & Simmons and Charles Goddard of Rosetta Tax provides comprehensive and up to date legal information covering:

  • UK real estate investment trusts (REITs)—summary
  • Background to the regime
  • Form of a UK REIT
  • The conditions
  • Breaching the conditions and failing the tests
  • Operation of the regime—the ring fence
  • Property rental business
  • Tax treatment of the UK REIT
  • Taxation of shareholders—distributions
  • Taxation of shareholders—withholding tax
  • More...

UK real estate investment trusts (REITs)—summary

FORTHCOMING CHANGE: Finance Bill 2022 will amend the real estate investment trust (REIT) regime. The amendments aim to reduce administrative burden and unnecessary costs for certain REITs and to increase the attractiveness of the regime. The changes amend:

  1. the listing requirement

  2. the definition of an overseas equivalent of a UK REIT

  3. the holders of excessive rights rule, and

  4. the balance of business test

This follows a review of the UK funds regime and in particular, a consultation on the tax treatment of asset holding companies.

The government also consulted until 20 April 2021 on the UK funds regime more generally and sought views on REITs and:

  1. the interest cover test and the corporate interest restriction

  2. the three-year development rule

  3. the three property rule, and

  4. the overseas property rules

See: Finance Bill 2022 policy paper, draft legislation and explanatory notes, Taxation of asset holding companies in alternative fund structures (second stage consultation), Review of the UK funds regime: a call for input and News Analyses: Legislation Day: Draft Finance Bill 2022—Tax analysis—Real estate investment trusts (REITs)—amendments and Promoting UK funds—potential reform of the UK REIT regime.

The regime for UK real estate investment trusts (UK REITs, or just REITs) was introduced on 1 January 2007.

There are currently around 50 UK REITs, many of which converted into REITs when the regime was introduced. The original UK

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