Real estate investment trusts (REITs)

Produced by Tolley in association with of Crane Dale Tax, part of AMS Group

Corporation Tax

Guidance

Introduction to REITs

A real estate investment trust (REIT) is not a formal trust, but a company which qualifies for special tax treatment under CTA 2010, Part 12.

REITs are similar to collective fund vehicles (such as unit trusts) in that they allow individual and corporate investors to pool their resources so as to provide them with opportunities which might not have been open to them otherwise, to invest in commercial and residential property.

A simplified summary of REITs is set out below:

•
a company notifies HMRC that it will become a REIT and that the qualifying conditions will be met
•
tax is borne at the shareholder level, not the corporate level, as if shareholders had received the income or gains directly from the property
•
dividends from REITs have basic rate income tax withheld at source by the REIT and are taxable on the shareholder as if they were profits of a UK property business. For this and the reason above, investors receive broadly

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Rob Durrant-Walker

Tax Director at Crane Dale Tax , Corporate Tax, OMB, Personal Tax

Rob is a cross-tax advisor with a particular focus on property tax planning, and business structure planning for OMB’s. He provides tax advice to other accounting firms, balancing commerciality, ethics, and understanding complexity. His 30+ years of experience start at the Inland Revenue in Hull. After completing his ATT and CTA by 1999 with PKF, he subsequently worked at KPMG and UHY prior to managing the business tax team as a director at Garbutt + Elliott. Rob is now Tax Director at the independent tax consultancy, Crane Dale Tax. He is a regular author for Taxation magazine with many articles and Readers Forum contributions since 2005, and he contributes as a virtual member to the CIOT Property Tax technical committee. Rob works remotely from Vancouver in Canada.

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