New legislation sees uptick in REIT conversions

Tax implications

Recently announced changes to government regulation concerning the taxation of UK commercial property holdings for overseas companies and non-residents have led several UK listed property companies to take on REIT status. Andrew Dewhirst, Picton's finance director, explains what is behind the move.

We had been aware of the government's plans for non-resident companies to be brought within the scope of UK corporation tax in respect of their UK property income for some time, but the industry was taken somewhat by surprise by last year's Budget announcement that non-residents would be taxed on the disposal of UK commercial property. While both pieces of legislation were significant for shareholders in property investment companies, such as Picton, the latter was particularly important because of the relatively short timeline to implementation, which is the 1 April 2019. Three prope...