UK real estate investment trusts (REITs)—summary
Produced in partnership with Martin Shah of Simmons & Simmons LLP based on material originally written by Charles Goddard of Rosetta Tax LLP
UK real estate investment trusts (REITs)—summary

The following Tax practice note produced in partnership with Martin Shah of Simmons & Simmons LLP based on material originally written by Charles Goddard of Rosetta Tax LLP 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: As part of review of the UK funds regime and in particular, a consultation on the tax treatment of asset holding companies, the government consulted until 23 February 2021 on changes to the real estate investment trust (REIT) regime including the:

  1. listing requirement

  2. institutional investors and close company requirement

  3. holders of excessive rights rule, and

  4. balance of business test

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: Taxation of asset holding companies in alternative fund structures (second stage consultation), Review of the UK funds regime: a call for input and News Analysis: 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 REITs have been joined by a number of additional entrants to the regime as a result of changes to the entry rules, including, in particular:

  1. the abolition of the entry charge

  2. the relaxation of the requirement for the listing of a company, so that

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