Worldwide Real Estate Investment Trust (REIT) Regimes

Real Estate Investment Trusts (REITs) have bounced back from the financial crisis with various new strategies employed by key players in the sector. In our latest review of the global REITs regimes we provide a high level comparison of key REITs attributes.

Since REITs have been introduced in the UK there have been a number of developments.

The legislation has been rewritten into the Corporation Tax Act 2010 as part of the tax law rewrite project. HM Revenue & Customs are currently updating guidance to reflect the new legislation and practical experience. The ability to pay rental income distributions as stock dividends was introduced as part of the Finance (No 3) Act 2010.

The Government has launched a consultation as part of the 2011 budget announcements on how to simplify and improve the legislation. The changes proposed include:

  • abolition of the entry charge;
  • permission to list on AIM and other more junior stock markets;
  • simplification of shareholding requirements to encourage institutional investors, allowing a grace period when a new REIT could be “close”;
  • enabling cash to be a good asset; and
  • refining the definition of “finance” for the finance cost ratio.

Any changes resulting from the consultation are not expected to be legislated until 2012.

For further information about the UK REIT regime and other country regimes please download a copy of ‘Compare and contrast: Worldwide Real Estate Investment Trust (REIT) Regimes’.