About Assisted Living REITs

Exemption from Corporation Tax

One of the primary tax benefits of a UK REIT is that any rental income or capital gains from a qualifying property rental business is exempt from corporation tax. This exemption applies only if the REIT complies with certain requirements, such as distributing at least 90% of its qualifying property rental income as dividends to shareholders.

Exemption from Capital Gains Tax

When a UK REIT sells a property or disposes of certain other assets used in its property rental business, it is generally exempt from paying capital gains tax. This encourages REITs to make strategic property sales and optimize their real estate portfolios.

Dividend Withholding Tax Exemption

Dividends paid by a UK REIT to its shareholders are typically not subject to withholding tax. This means that investors receive the full dividend amount without any tax deductions at source. However, the tax treatment of these dividends in the hands of individual shareholders may vary based on their tax circumstances.

No Double Taxation

REIT investors are generally not subject to double taxation on the rental income generated by the REIT. The income is typically taxed at the REIT level, and investors receive dividends that are, in most cases, treated as income in their tax returns. The dividend income is then subject to individual income tax.

It's important to note that REITs in the UK are subject to specific rules and regulations, and they must meet certain criteria to maintain their REIT status. These criteria include distributing rental income as dividends, investing primarily in qualifying real estate assets, and meeting ownership and management structure requirements.

Additionally, the tax treatment of REIT dividends at the individual level may vary depending on the investor's personal tax circumstances. Therefore, individuals should always consult with tax professionals to understand the specific tax implications of their business.