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Real Estate Investment Trusts: Finance Bill 2012 - EY - United Kingdom

Real Estate Investment Trusts: Finance Bill 2012

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What we expect in
Finance Bill 2012

The Government’s review covers a range of legislative changes to the mechanics of the REIT regime intended to increase take-up. Areas that will encourage the residential market are of particular interest, with the key focus on increasing UK housing stock. The changes will provide a great opportunity for real estate developers to engage HMT and determine whether they could benefit from changes.

Main areas of focus are:

Removing existing barriers to entry, including:

  • Abolishing conversion charge
  • Enabling increased institutional REIT ownership
  • Introducing a close company grace period for new REITs
  • Relaxing listing requirements

Some factors have already been identified, but HMT remains open to other areas of legislation that could encourage investment.

Simplification of the regime: The regime’s complexity may be a barrier to its growth as the preferred choice of UK property investment vehicle, but this does not seem to be part of the consultation at this stage.

Full details of the changes, and their likely impact on the UK REIT market, will not be known until we see draft legislation in late Autumn.

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