REIT Feasibility Service
A key step in the early stages of establishing a property investment portfolio is identifying the appropriate entity to hold the properties. In recent years there has been increased interest in using a UK Real Estate Investment Trust ("REIT") as a holding vehicle, driven by its tax efficiency and the relaxation of some of the entry requirements.
No corporation tax is paid on the profits of a REIT’s UK property rental business. Instead, the tax charge is pushed back to the investors as though they had invested directly in the property. UK REITs, therefore, combine the tax benefits of a direct property investment with the economies of scale that come with investing through a fund with many properties.
Richard White is a former partner and head of real estate tax at EY and KPMG. He is a well-renowned authority on real estate tax structuring. Under his supervision, AORA has developed software aimed at professional advisers for determining if a property group and its investors can qualify as a UK REIT under the Corporation Tax Act 2010.
Analysing whether a particular structure and investor base meets these requirements can be time-consuming and expensive. A company must meet several strict technical conditions to qualify as a REIT. AORA’s REIT tool covers the entry criteria and produces comprehensive reports for immediate review and strategic input by users. The discipline and diligence inherent to these results, alongside the suitability and usability of the documentation generated, mean radical improvements to the entire process of evaluating REIT eligibility.
For investors and fund administrators, our Feasibility Package allows users to obtain a quick and accurate high-level assessment, focussing on the two most widely met stumbling blocks to REIT qualification - the so-called "listing" and "non-close" requirements. Users provide us with the relevant information and will receive a report detailing the reasons why these legislative tests are/ are not met. This can then lead to an informed decision as to whether more detailed advice is required, thus short-circuiting the time spent with professional advisors and significantly reducing costs. This can also be used for the annual compliance check.
The Feasibility Package costs £5,000 per report (plus VAT if applicable), and we guarantee delivery of the report within 3 working days of providing the required information.
Or for more information please email reit@aoralaw.com.
