Finance Bill — Clause 38 — Real Estate Investment Trusts — 2 Jul 2013 at 18:45

The majority of MPs voted against requiring a report on the operation of Real Estate Investment Trusts (REITs) to include consideration of the Government's support for house building, including through the tax system.

MPs voted to reject adding the following new sub-clause to Clause 38 of the Finance Bill^[1]:

• (2) Notwithstanding the provisions of paragraph 13 of Schedule 18, that Schedule shall come into force after the Chancellor has conducted, and placed in the House of Commons Library, a review of the operation of the interaction of REITs with the Housing Market. The Review shall consider—
• (a) tax measures in place to support house building; and
• (b) what steps HM Government have taken to support house building.’.

The explanatory notes to the Bill^[2] explain what Real Estate Investment Trusts (REITs) are:

• UK REITs are tax advantaged vehicles introduced to encourage investment in the property sector.
• A REIT is exempt from corporation tax on its profits from a property rental business. It is required to distribute 90 per cent of its profits by way of a property income distribution (PID). A PID is treated in the hands of investors as income from property and taxed accordingly.

REITs were introduced into the UK by Part 4 of the Finance Act 2006^[3]

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• [1] Clause 38 of the Finance Bill 2013
• [2] Finance Bill 2013 Explanatory Notes
• [3] Part 4 of the Finance Act 2006

Debate in Parliament | Source |