REITS and Capital Allowances
Real Estate Investment Trusts (REITs) have been effective in the UK from 1st January 2007. REITs are an alternative form of investment into real estate which is tax transparent and efficient. The REIT is obliged to make a maximum distribution of 90% of its exempt rental income to the shareholders.
The mandatory deduction of the "maximum capital allowances" will influence the calculation of the profits of the exempt rental income for distribution. It is particularly important converting to REIT, to consider the policies, review systems and manage the capital allowances.
The key risks identified on capital allowances are:
Maximum Value
Auditable
Notional Claims
Accountable
Get It Wrong
Exclude Grey Items
Manage the Capital Allowances Pool
Estimate/Forecasting Inaccurate
Non Compliance
Timing
Gleeds are currently involved in advising several major companies which have now become or are considering conversion to REITs on capital allowances with a fully compliant "M.A.N.A.G.E.M.E.N.T." service, to address the above risks. Working examples have been developed by Gleeds Financial Services (GFS) .
GFS has in depth knowledge of glocal REITs and the potential tax reliefs avaliable.
If you wish to discuss any issues, please do not hesitate to contact:
Clive Curd on 020 7631 7000.
