BECOMING A UK-REIT 03
1. INTRODUCTION
The UK launched its REIT regime in 2007 as a way of encouraging stable and regulated investment in UK real estate, particularly addressing the long term lack of supply of housing in the UK. Since its introduction, the UK-REIT tax regime has become a primary approach to the structuring of collective investment in UK property. The principal entrants to the regime in the early years were the long-established commercial property investment companies. A steady stream of entrants have since joined and the sector has continued to go from strength to strength, so much so, there are now over 100 REITs. New REIT entrants have generally focused upon particular asset classes, such as logistics, PRS, medical/healthcare, or social housing, or other such assets.
During the past few years there has been a change in the general tax environment following the OECD’s focus on base erosion and profit shifting. This has led to substantial changes being made to UK domestic tax legislation. The UK Government’s additional reforms to the regime, effective from 1 April 2022, are designed to simplify it and make it more attractive to establish new REITs. As a result, we expect further new REIT entrants. The UK-REIT regime remains an HMRC approved structure, which is attractive to a wide range of investors and has helped with the raising of funds in the capital markets for a number of groups. This guide is intended to provide practical insights into the UK-REIT regime, the main conditions required to be met and issues a potential entrant might want to consider.
Made with FlippingBook HTML5