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What the government said in March 2005 about UK-Real Estate Investment TrustsAlongside Budget 2004, the Government launched a consultation to consider the introduction of Real Estate Investment Trusts (REITs) with the aim of promoting greater efficiency in the property investment market, supporting the Government’s wider objective of raising UK productivity. The Government is today publishing ‘UK Real Estate Investment Trusts: a discussion paper’, along with a summary of responses to the Budget 2004 consultation. The Government is committed in principle to reforming the taxation of property investment. The consultation has enabled the Government to better define the key features of a potential UK-REIT model that allows for market flexibility. The paper also raises some challenging issues in designing the tax treatment for a model that meets both the needs of the UK property investment market and the Government’s objectives for a UK-REIT. The Government will therefore engage in further dialogue with industry representatives. Subject to finding a workable solution that meets the stated objectives, including reform at no overall cost to the Exchequer, the Government aims to legislate for a UK-REIT in Finance Bill 2006. |