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UK Real Estate Investment Trusts (UK REITs) are an increasingly popular option for property investment structures which can provide increased liquidity compared to direct ownership in addition to diversification of assets.

The criteria for a UK REIT include a vehicle being listed or traded on a "recognised stock exchange". TISE is deemed a Recognised Stock Exchange by the UK Tax Authority, HMRC under section 1005 of the Income Tax Act (2007) and therefore meets this requirement, in addition to which it offers a responsive and cost effective alternative. TISE is now home to a quarter of all UK REITs due to their pragmatic listing requirements.

A UK REIT must be managed and controlled only in the UK and registered there for tax purposes. However this does not prevent a UK REIT from using Isle of Man companies which could offer a number of advantages. Isle of Man companies can benefit from our modern Companies Act 2006 provisions which operate on a solvency basis (assets greater than liabilities and the ability to pay debts as they fall due) as opposed to a more restrictive capital maintenance regime. This provides greater flexibility and simplifies requirements for capital structuring. In addition there is no stamp duty payable on the transfer of shares in an Isle of Man company.

At least 75% of the group's business must be property investment in order to qualify as a UK REIT. Income and capital gains from the property rental business are exempt from tax and there is an obligation to distribute 90% of the qualifying income as property income dividends. A diversity of ownership test must also be met, which requires ownership for the benefit of more than five persons.

UK REITs can list on TISE under Chapter 7 as Investment Vehicles which allows a 25% free float exemption for issued share capital in public hands. This can be useful where there is a smaller number of institutional investors and also where the shares are held for the long term. This does not preclude those who want the more widely held REITs and the option to trade.

IQE Securities Sponsor Services Limited can act as your Sponsor to seek admission for listing on TISE. Please contact Anne Couper Woods, Director of IQE Securities Sponsor Services Limited at or Helen Hall, Head of the Sponsor Team at for further information.

We have the expertise to assist with multi-jurisdictional fiduciary services for international structures

On a recent transaction we worked closely with IQE to set up and run a corporate structure to facilitate a new residential development in London. We found the IQE team responsive and proactive. It was clear that their property experience added value and understanding of the clients’ requirements on the project. Christine Jackson, Partner, Real Estate Group, Lawrence Graham LLP

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