UK REITs—taxation of the REIT and shareholders
Produced in partnership with Martin Shah of Simmons & Simmons LLP based on material originally written by Charles Goddard of Rosetta Tax LLP
UK REITs—taxation of the REIT and shareholders

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 REITs—taxation of the REIT and shareholders
  • Effect of entry to the regime
  • Entry before 17 July 2012—entry charge
  • Operation of the UK REIT regime—the principles underpinning the regime
  • Tax treatment of the UK REIT
  • Income profits
  • Calculation of profits
  • Loan relationships and derivative contracts
  • Capital allowances
  • Capital gains
  • More...

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.

This Practice Note examines the tax treatment of UK real estate investment trusts (UK REITs) and their shareholders.

The purpose of the UK REIT regime is to provide a tax-efficient vehicle designed to allow investment into the UK real estate sector by a wide range of investors. The UK REIT was therefore designed to move the tax point away from the vehicle and onto shareholders.

This is, broadly, achieved by:

  1. exempting from tax the profits on real estate investments, and related gains, realised in the UK REIT company, but

  2. requiring

Related documents:

Popular documents