BECOMING A UK-REIT 11
POTENTIAL UK-REIT CANDIDATES UK-REIT status may be attractive to the following categories of property investment vehicle:
AIM LISTED / UNLISTED PROPERTY COMPANIES
FAMILY-OWNED COMPANIES
Family companies that are considering succession planning, expansion or exit may join the regime prior to widening their shareholder base, utilising the three-year grace period to meet the close company test.
Property companies whose shares are listed and subject to trading on AIM or equivalent markets are able to convert to UK‑REIT status without incurring the cost of obtaining and maintaining a listing on the main market.
OFFSHORE PROPERTY COMPANIES
START-UP PROPERTY INVESTMENT COMPANIES
UK-REIT conversion achieves tax efficiencies for holding UK properties, without the need to maintain an offshore structure, thereby freeing up senior management time and reducing administrative costs. The widening of the taxation of UK real estate capital gains made by non-UK resident investors from April 2019 may further encourage conversion to a UK‑REIT. Where there is a mixed UK and overseas property group it is worth noting that a UK‑REIT can, in principle, be an investor in the UK qualifying asset holding company (QAHC) regime introduced with effect from April 2022.
As cash is treated as a ‘good’ asset for the purposes of the balance of business assets test, it is easier for start-up UK-REITs to raise funds to be spent over time.
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