UK Real Estate Investment Trust ("REIT")
The following statements are intended as a general guide to certain UK tax considerations in relation to the Ordinary Shares of Shaftesbury Capital PLC (“Shaftesbury Capital”, “the “Company” or “the “Group”). They are based on UK tax law as at the date of this document and what is understood to be the current published practice of HM Revenue & Customs (“HMRC”) (which may not be binding on HMRC), both of which are subject to change at any time, possibly with retrospective effect. Shaftesbury Capital accepts no liability for the contents of these statements. Shareholders should seek independent tax advice if they are in any doubt of the implications of Shaftesbury Capital’s REIT status on their tax position.
Shaftesbury Capital is a Real Estate Investment Trust ("REIT"). The Company was previously called Capital & Counties Properties PLC, and converted to a REIT on 9 December 2019. It maintains its primary listing status on the London Stock Exchange and secondary listing status on the Johannesburg Stock Exchange.
Capital & Counties Properties PLC merged with Shaftesbury PLC (which was also a REIT) on 6 March 2023.
A REIT is a UK listed property investment company, which is exempt from UK corporation tax on income profits and capital gains that arise from its qualifying property rental business (subject to certain conditions being met, as set out in the UK REIT legislation). This regime was introduced in the UK with effect from 1 January 2007 although similar regimes exist in other countries.
As a UK REIT, Shaftesbury Capital is required to distribute at least 90 per cent of its tax exempt property rental profits to shareholders as Property Income Distributions (“PID”) and 100 per cent of dividends received from other UK REITs. The taxation of a PID differs from the tax treatment of normal dividends (“Non-PID”).
PIDs are generally treated in the hands of shareholders as UK property rental profits and will be paid to shareholders net of withholding tax (at the basic rate of UK income tax, currently 20 per cent, increasing to 22 per cent from 6 April 2027). In general, the withholding tax provisions on PIDs will apply to all individual and non-UK resident shareholders (some non-UK resident shareholders may be able to apply for the repayment in whole or in part of tax deducted, pursuant to the application of a relevant double taxation convention).
Certain classes of shareholder can receive PIDs gross. The categories of shareholder which generally qualify for exemption from the REIT UK withholding tax include:
- UK companies
- Charities
- Local authorities
- UK pension schemes
- Managers of Personal Equity Plan ("PEPs")
- Individual Savings Accounts (“ISAs") and Child Trust Funds ("CTFs")
An exemption from the application of withholding tax to PIDs can be claimed by completing the relevant declaration form below and returning it to Shaftesbury Capital’s UK registrar:
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds LS1 4DL
REIT beneficial owner declaration
Although REITs do not pay corporation tax on profits and gains from UK qualifying property rental business, they remain liable for corporation tax on non-property investment business profits including rent or profits on the sale of trading properties.
Any distributions from Shaftesbury Capital’s residual (non-exempt) business will continue to be paid as normal dividends (“Non-PIDs”). PIDs and Non-PIDs can take the form of cash, or scrip dividend alternative where offered.
Information on taxation of UK and South African shareholders under the REIT regime can be downloaded here.