Already present in US real estate marketplace, the Reit model came into force yesterday.
This new tax efficient status has been welcomed by a number of property firms in the UK, such as British Land who have chosen to adopt the new status at a one off cost of 300m yet equivalent to just one year’s corporation tax bill. Ten of Britain’s largest listed commercial property companies converted into Real Estate Investment Trusts which means that as property-managing firms they pay little or no tax as long as most of their earnings are paid to shareholders as dividends.
Commercial property it seems, is the market to be in at the moment as positive reaction to the newly converted firms showed in strong share gains for the companies in question.
Do you plan on opening a Real Estate Investment Trust? If so email us with your thoughts/experiences.