Individual Investors are looking at Real Estate companies in the UK that are registered for REIT’s combined with using you person ISA allowance in the UK make the option worth a second look.
REITs do not have to pay corporation tax or capital gains tax. Individual Investors in REITs will still have to pay tax on dividends however taxpayers can avoid paying tax on dividends simply by placing their REIT within an ISA.
Compared to investing in a tradional UK equity, the REITs companies have a distinct advantage. A UK resident over the age of 18 can invest in a MAXI-ISA, thereby avoiding personal tax on dividend. Investors can invest up to £7000 per person as an ISA, the shares purchased need to be registered on a majour exchange such as the LSE.
Barclays offer a nice simple wrapper for ISA’s.
British Land and Land Sec are the big players in the UK REITs market, controlling about 70% of the market in the UK.
Furthermore look at companies such as Slough Estates as it has a strong UK portfolio. The company has a a large percentage of it’s business in Europe which is yielding very good property returns. Additionally the managment team seem to be very clued up. Be warned UK business that receives the REITS benefits looks to be around 50% of their portfolio. See www.sloughestates.com
A comaprison of the major REIT’s players is available at www.leasefinderuk.co.uk/Forms/REITs/Investing.aspx
By Paul Larkin
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