BECOMING A UK-REIT 15
5. ISSUES TO CONSIDER PRIOR TO MAKING A DECISION TO JOIN THE UK-REIT REGIME
SIZE OF UK PROPERTY BUSINESS There is no minimum size requirement for a UK-REIT (indeed there are a few UK-REITs with a market capitalisation of less than £50m). However, this is a factor that should be considered when assessing the likely benefit of UK-REIT status against cost. Most established UK-REITs have a market capitalisation in excess of £200m, and in our experience most UK-REITs target a minimum market capitalisation of £100m for a UK listing. UK-REIT status affects only the tax treatment of any UK property rental business undertaken by the UK-REIT. Accordingly, UK-REIT status will be of less relevance to groups with only a small UK presence. CURRENT STRUCTURE It may be necessary to restructure certain aspects of the corporate or financing structure of a business prior to joining the UK‑REIT regime. This may be either to facilitate compliance with the UK-REIT tests or to remain tax-efficient once within the UK‑REIT regime. In addition to the tax implications of joining the UK-REIT regime, there are a number of non-tax issues that potential entrants will need to consider, particularly given the ongoing requirements in order to remain a UK-REIT.
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