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UK Real Estate Investment Trusts (UK-REITs)-Pre Budget Statement issued 5th December 2005 by Yvette Cooper

UK Real Estate Investment Trusts (UK-REITs)

Following Kate Barker’s recommendation, the Pre-Budget Report announces that the Government will bring forward draft legislation to establish UK-REITs for inclusion in the 2006 Finance Bill. Details of the tax proposals will be published by HM Revenue and Customs before the end of 2005 and will include the following key features:

* the regime will be open to companies, resident in the UK, that are publicly listed on a Recognised Stock Exchange;

* companies or groups that meet the UK-REIT eligibility criteria as set out in legislation will not pay corporation tax on qualifying property rental income or qualifying chargeable gains; and

* a requirement to distribute at least 95 per cent of net taxable profits on rental income to investors, who will then pay tax at their marginal rate.

The Government remains committed to ensuring no overall loss of revenue from the introduction of UK-REIT legislation and will announce at Budget 2006 final details of the conversion charge applying to companies joining the regime.

UK-Real Estate Investment Trusts Draft Proposals for Legislation