Making use of a trust means operations can be split
Real Estate Investment Trusts enable a company to separate its property holdings from its day-to-day operations.
Firms like Mitchells & Butlers could sell off some of its properties if it were to fear customers' spending was declining.
REITs, which were developed in the United States and which have grown in popularity in recent years, are exempt from corporation tax.
But firms converting to REIT status must pay a conversion charge of two per cent of the value of its qualifying properties. REIT firms are obliged to distribute 90 per cent of their profits on rental income to shareholders, although basic rate tax is withheld on dividends.
Members of the public may choose to invest in REITs because it allows them to put their money in property without facing the complexities of investing in bricks and mortar.
If shareholders were to want to cash in on their investment then they could sell their REIT units far more easily than selling a property.
The full article contains 172 words and appears in n/a newspaper.
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Last Updated:
21 May 2008 8:46 AM
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Source:
n/a
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Location:
Yorkshire
