Spring Budget 23: Government changes tax rules for REITs

Bid to enhance 'competitiveness'

The UK Government has changed the tax rules governing the real estate investment trust regime in a bid to “enhance its competitiveness”, as part of Jeremy Hunt’s Spring Budget delivered today (15 March).

Taking effect from 1 April this year, the new measure removes the requirement for a REIT to hold a minimum of three properties if it holds a single commercial property worth £20m or more.  The rule that deems the disposal of a property within three years of being significantly developed to be outside the property rental business will be changed so the valuation used when calculating what constitutes a "significant development" reflects property value increases.  The rules governing the deduction of tax from property income distributions paid to partnerships will also be amended to be ...