Why the UK may turn to Reits

The UK government has been in talks with members of the property industry for years about the potential of real estate investment trusts (Reits), a new tax-efficient way of investing in property. If the UK sanctioned a US model, Reits would not have to pay tax on their income as long as they distributed a high proportion of the cash – usually between 50% and 60% of revenues – to shareholders.

The UK government has been in talks with members of the property industry for years about the potential of real estate investment trusts (Reits), a new tax-efficient way of investing in property. If the UK sanctioned a US model, Reits would not have to pay tax on their income as long as they distributed a high proportion of the cash – usually between 50% and 60% of revenues – to shareholders.

Reits offer a way of investing in property – potentially residential as well as commercial – through a securitized, typically closed-ended and entirely tax transparent vehicle that is capable of being listed on a stock exchange.

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