Budget 2010 – UK REITS
Changes are to be made to the UK Real Estate Investment Trusts (REITs) legislation. It will be modified to allow UK REITs to issue stock dividends in lieu of cash dividends in order to meet the requirement to distribute 90% of the profits from the property rental business of the REIT.
A UK REIT is a qualifying group or company with a property rental business that elects to join the UK REITs regime. The principal benefit of doing so is that the profits and gains arising from the property rental business are then exempt from corporation tax.
Shareholders will continue to be taxed as if they had received rent. The existing REITs legislation will be amended in a Finance Bill to be introduced as soon as possible in the next Parliament. The measure will have effect for property income distributions made on or after the date of Royal Assent.