REITs – What do they invest in? Part Two – Investing in other REITs

 Investment Tax, Property Tax, REITs  Comments Off on REITs – What do they invest in? Part Two – Investing in other REITs
Jun 272015
 

In my interview with Taxlinked, I mentioned the fact that REITs could invest in other REITs as well as in the traditional bricks and mortar that one associates with property funds. In this article we shall have a closer look at what this statement actually means.

In particular we shall find out that while it is possible to have a REIT holding shares in other REITs, this cannot be the sole investment – there needs to be a minimum level of bricks and mortar for this to be possible. Furthermore, while distributions from other REITs are tax free, the exemption does not extend to capital gains. Continue reading »

TaxLinked Interview – All about Real Estate Investment Trusts!

 Investment Tax, REITs  Comments Off on TaxLinked Interview – All about Real Estate Investment Trusts!
Mar 312015
 

Taxlinked is an online community designed and created exclusively for international tax, corporate and legal professionals. It can be thought of as a version of linkedin but for tax people instead. There are forums to share news and views, as well as a number of valuable knowhow resources. As well as topical articles, there are even e-books which are the result of collaboration between the members.

I joined recently, and was immediately invited to give an interview. Well, I must say I was flattered – I never thought that someone would want to interview me outside the job hunting process! Given my recent article Coming Onshore for Which Investment Trust, I thought that REITs might be a good subject, especially for our foreign tax friends.

Here is the interview, reprinted here with the kind permission of Taxlinked. Continue reading »

Coming Onshore – are Investors better off when Offshore Property Funds Convert to REIT status?

 Investment Tax, Property Tax, REITs  Comments Off on Coming Onshore – are Investors better off when Offshore Property Funds Convert to REIT status?
Feb 162015
 

Shortly before Christmas last year, the financial press reported that the Guernsey investment company F&C UK Real Estate Investments – F&C for short – was planning to “come onshore” and convert to a UK REIT. This is just the latest of a number of closed ended property funds based in the Channel Islands that have taken this step, Standard Life being another well know name to make the change (or to give it its full name, Standard Life Investments Property Income Trust).

What does it mean to “come onshore” and why are these funds doing it now? In the following article, we shall explain the consequences of converting to a REIT, and in particular ask the question “How does it benefit investors?” Continue reading »

Jul 152014
 

Following this year’s Budget, the Government published a Consultation Paper on its plan to bring non-residents within the charge to capital gains tax on residential property. This article discusses the proposal, with a particular emphasis on what this means for offshore investment funds. Continue reading »

Real Estate Investment Trusts – What do they invest in? Part One – Bricks and Mortar

 Investment Tax, Property Tax, REITs  Comments Off on Real Estate Investment Trusts – What do they invest in? Part One – Bricks and Mortar
Jun 272014
 

This is the first of two articles where we take a closer look at the type of asset that goes into a REIT’s property portfolio. While the answer is perhaps obvious (property of course!), there are certain restrictions that wouldn’t normally apply to other commercial landlords. Furthermore, it isn’t so obvious that a REIT can hold property indirectly through other investment vehicles such as unit trusts, OEICs and partnerships.

In this article we shall concentrate on the type of direct investments that one would expect to see in a property portfolio – the bricks and mortar. Indirect investments will be the subject of the next article. Continue reading »

Nov 152013
 

In our introductory article on REITs, we looked at how the underlying property rental business is taxed, and how the tax position of the fund is effectively transferred to the investors.

In particular, we saw that there is no tax, both on income profits and capital gains at the fund level. The profits are taxed as property income when distributed to the shareholders, while capital gains accrue in the fund, and are only taxed when the shareholders realise their investment.

But what does it take to be a REIT and to qualify for the tax breaks? This is the topic that we explore in this article. Continue reading »

An Introduction to Real Estate Investment Trusts

 Investment Tax, Property Tax, REITs  Comments Off on An Introduction to Real Estate Investment Trusts
Oct 252013
 

A Real Estate Investment Trust – or REIT for short – is a property investment company which pays no tax on the income and capital gains derived from its rental assets. Instead, the tax is effectively transferred to the shareholders, who are treated as if they had invested directly in the underlying properties.

In this introductory article, we shall look at how the tax legislation achieves this result. We shall go on to look at other aspects of the REIT regime in subsequent articles.

Continue reading »