In what seems to be a continuation of a trend, Schroder Real Estate has announced today that it is applying to become a REIT. The reason behind this is a change to their current taxation arrangements – they had a deal with HMRC whereby the tax they paid as an offshore company was fairly low. This agreement expires today and so they intend to move onshore. The tax bill for this year is estimated as £198k. This would have risen they think to between £1.45m and £1.7m had they done nothing but, under the REIT regime, they won’t have to pay UK income tax on Qualifying Property Rental Business which represents the bulk of their income.
There’s an EGM for shareholders to approve the change on 28 April.
SREI : Schroder Real Estate to become a REIT