IFM22100 - Real Estate Investment Trust : Conditions and tests: maximum shareholding: CTA2010/S551- S554A
Background
One aim of the UK-REIT rules is to move the point of taxation from the investment vehicle听迟辞 individual investors. 聽To achieve this PIDs are normally paid under deduction of withholding tax聽(except where paid to certain investors who are to be paid gross - see IFM28125) and taxed as income from property in the investor바카라 사이트檚 hands.
Double Taxation Agreements (DTAs) often allow shareholders holding 10% or more of the capital of a company聽beneficial treaty rates of tax on dividends. Where there are no specific provisions for distributions from REITs in those DTA's, this means that certain shareholders holding 10% or more of the capital of a UK REIT may be able to reclaim all or a large proportion of the UK withholding tax on PIDs. 聽
The 바카라 사이트榟older of excessive rights바카라 사이트� (HoERs) rules (CTA2010/s551- S554A) counter this risk of reduced (or no) tax being paid on a PID by imposing a tax charge on a UK- REIT if it makes a distribution to a holder of excessive rights that is not an 바카라 사이트渆xcluded holder바카라 사이트� (see IFM22105). These rules encourage聽REIT's to ensure that distributions are not made to HoERs. Certain reasonable steps can be taken to avoid this charge (see IFM22125听迟辞 IFM22150). 聽