Real Estate Investment Trusts

Real Estate Investment Trusts were introduced to the UK in 2007 with the intention to create increased flexibility, liquidity and tax efficiency. Many UK listed property companies converted to the new REIT. 75% of the REITs business activity must be property rental activity with reference to total income and value of it's assets. A selection of listed UK REITs are provided below.

A Real Estate Investment Trust (REIT) is a single company REIT or a group REIT that owns and manages property on behalf of shareholders.

* A REIT can contain commercial and/or residential property but excludes the letting of owner-occupied buildings.

* REITs provide a way for investors to access the risks and rewards of holding property assets without having to buy property directly.

* In the UK, a company or group of companies can apply for 'UK-REIT' status, which exempts the company from corporation tax on profits and gains from their UK qualifying property rental businesses.

* In return, UK-REITs are required to distribute at least 90% of their taxable income, for each accounting period, into the hands of investors, where the income is treated as property rental income rather than dividends. In this way taxation of income from property is moved from the corporate level to the investor level.

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