Real Estate Investment Trusts (REITs) are companies that manage a portflio of real estate to earn profits for shareholders. Their special tax status means that they pay no corporation tax on the profits of their rental business.



  • REITs must pay out 90% of their income to shareholders every year
  • In this way taxation of income from property is moved from the corporate level to the investor level
  • REIT shares can be held in ISAs and Child Trust Funds (CTFs), and the managers of these can receive gross distributiions, making these highly tax efficient
  • REITs must be primarily engaged in property investment, rather than in development or other non-property related activities
  • As REITs are all listed property companies, they offer investors a level of liquidity
  • Dividends from REITs are treated as a property income to the investors, and are taxed accordingly. The dividends are subject to withholding tax at a basic rate of income tax, except for certain classes of investors who can register to receive gross rather than net payments. These include charities, UK companies and pension funds


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