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ARTICLE · 08 AUGUST 2023

On The REIT Track

Morrison Foerster
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UK real estate investment trusts (UK REITs) benefit from certain tax exemptions that have the effect of putting their shareholders in a tax position broadly equivalent to that of a direct investor in UK real estate.

United KingdomReal Estate and Construction
Oliver S'Jacob
Oliver S'Jacob
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UK real estate investment trusts (UK REITs) benefit from certain tax exemptions that have the effect of putting their shareholders in a tax position broadly equivalent to that of a direct investor in UK real estate. Those exemptions apply to both the rental income of, and gains arising in relation to, a UK REIT's "qualifying property rental business". In addition, the distribution of the income profits and capital gains from that business will be treated as UK property income (rather than a dividend) in the hands of those shareholders as if the entity were tax transparent, meaning that tax-privileged investors, such as registered pension funds, do not suffer any UK tax leakage as a result of investing in the UK REIT as opposed to the underlying real estate directly.

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Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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