This presentation majorly covers about the following: 1. Meaning of UK REIT 2.Benefits for companies 3.Benefits for Investors 4.How to qualify as a REIT 5 Changes to the UK REIT Regime 6.What are the risks associated with REIT.

1. UK REIT

2. WHAT IS UK REIT ?
 A (REIT) is a single company REIT or a group REIT that owns and manages property on behalf of shareholders.
 A REIT can contain commercial and/or residential property but excludes the letting of owner-occupied buildings.
 REITs provide a way for investors to access the risks and rewards of holding property assets without having to buy property
directly.
 In the UK, a company or group of companies can apply for ‘UK-REIT’ status, which exempts the company from corporation tax
on profits and gains from their UK qualifying property rental businesses.
 In return, UK-REITs are required to distribute at least 90% of their taxable income, for each accounting period, into the hands
of investors, where the income is treated as property rental income rather than dividends. In this way taxation of income from
property is moved from the corporate level to the investor level
 All REITs must be admitted to trading on a recognised stock exchange (which now includes AIM and the Specialist Fund
Segment of the Main Market)
Real Estate Investment Trust (REIT)

3. Benefits for
Companies
Tax efficient
structure
Access to new
investors /Capital
Potentially closer
performance to
NAV
Acquisition
currency

4. Benefits
for
investors
-
Potentially
high-yield
returns
Tax
transparent
Access to
property for
minimal outlay
Liquidity - easy
to buy/sell
Low/controlled
gearing
Portfolio
diversification

5. HOW TO QUALIFY AS A REIT
These qualifying conditions, as determined by HMRC, fall into 3 categories;
 Company conditions,
 Property rental business conditions
 Balance of business conditions.
In particular, a potential UK-REIT has to carry out a property rental business which
can be a UK property investment business or an overseas property investment
business. At least 75% of the group’s profits must derive from that property rental
business and at least 75% of the group’s gross assets must comprise assets or cash
involved in the property rental business

6. CHANGES TO THE UK REIT
REGIME
 Abolition of the conversion charge for companies joining the UK-REIT
regime.
 Relaxation of the requirement for a UK-REIT to be “listed on a
recognised stock exchange” to enable UK-REITs to be “traded on a
recognised exchange”.
 Introduction of a fixed grace period of 3 years for new UK-REITs to
meet the non close company requirement.
 Relaxation of the close company condition for institutional investors.

7. WHAT ARE THE RISKS?
 A REIT is dependent on both the performance of its particular sector and the geographical region
to which it’s exposed.
 REITs generally exhibit low growth since they must pay 90% of income back to investors. Thus, only
10% of income can be reinvested back into the business. REIT dividends are not treated under the
tax-friendly 15% rule that most dividends fall under.
 REITs can easily lose their status as such for reasons that include:
95% of the REIT's income is gross
Less than 75% of the REIT's income per tax year is real estate-based .
 Non-traded REITs are not traded on the stock market. Their purpose is to deliver consistent
dividends to shareholders until a company in which they hold investments is liquidated.