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21 February 2007 / Maria Kitt
Issue: 4096 / Categories: Comment & Analysis , Investments , Land & property , Trusts
MARIA KITT explores the opportunities and pitfalls presented by real estate investment trusts.

KEY POINTS

  • What is a REIT and how is it formed?
  • What conditions must a REIT satisfy to obtain the tax advantages?
  • The tax treatment of the investor's REIT income.
  • The ringfencing of a REIT's income and distributions.


REAL ESTATE INVESTMENT trusts arrived on 1 January 2007 and provided an opportunity for investors to acquire a share in the property market without the burden of property ownership. It also presented the chance for property groups to make profits and gains free of tax. It is estimated that the UK commercial property sector has assets valued in the region of £650 billion and there has been extensive consultation by HMRC with this sector and the London Stock Exchange to make the regime robust and effective. After a nine-year consultation process the opportunity has now arrived and...

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