Property: Investment Trusts

Treasury written question – answered on 9th January 2023.

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Photo of James Murray James Murray Shadow Financial Secretary (Treasury)

To ask the Chancellor of the Exchequer, what estimate he has made of the cost to the public purse of the Real Estate Investment Trust tax relief for UK single company Real Estate Investment Trusts (REITs) and REIT groups within the (a) FTSE 100 index and (b) FTSE 250 index in each of the last six financial years.

Photo of Victoria Atkins Victoria Atkins The Financial Secretary to the Treasury

An estimate of the cost of the Real Estate Investment Trust (REIT) tax relief is not available in these ways.

While a REIT is exempt from corporation tax on the income and gains of its property rental business, it is subject to a requirement to distribute its income to its investors, and these distributions are subject to a withholding tax. For UK investors these distributions are taxable as profits of a UK property rental business.

The regime collects the appropriate tax from the investors rather than the REIT and, as a result, there is no comparison between the taxation of a REIT and a standard UK company.

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