Autumn Statement - PwC comments on REIT’s and planning reform

Adam Yates, UK Real Estate Tax Leader at PwC, said:

“The Government continues to enhance the attractiveness of the UK Real Estate Investment Trust (“REIT”) regime by confirming that changes proposed earlier in the year will be enacted. These changes will be welcomed by UK property investors as this should allow a larger investor base to use the regime.

"Institutional investors will potentially have more flexibility on the type of structures that can be used to invest in UK REIT’s as they will be able to trace their ownership where they are the ultimate beneficial owner when satisfying the “non-close” condition.

"In addition, there is also a change to how interest cover is measured, now excluding from the certain amounts in respect of which a deduction is denied for corporation tax purposes. Co-ownership Authorised Contractual Schemes that meet a genuine diversity of ownership condition or a non-close condition are also added to the list of entities regarded as institutional investors.

"Property groups aspiring to join the REIT regime may find that these changes help them qualify where previously they did not. However, the rules for tracing through to institutional investors are complicated and firms will likely need help in navigating the changes.”

Justin Martin, Devolved and Local Government Leader at PwC, said:

“The nuts and bolts of driving levelling up require increased flexibility in the planning regulations and it's good to see progress being made in this area. Local government will need to increase planning capacity, which will be challenging given current skills shortages and existing demand on services. Further reform around planning governance is required to really drive the benefits of these changes home”.