Overseas REITs

Hi, how would dividends and Capital gains from REITs listed on the Kuala Lumpur Stock Exchange (Malaysia) be taxed? Would it be as gains and dividends, or income? Thanks

Hi,
 

Please see guidance to determine the taxation of the REIT : Investment Funds Manual    . Thank you.

Hi, I am a UK tax resident and I receive dividends in excess of £7,000 per year from some Singapore REITs. Last tax year, I saw an answer on this site from HMRC Admin 19 saying that Singapore REITs are to be treated as (foreign) dividends, as per art. 10 of the Singapore-UK DTA (Multilateral Instruments and the 1997 Singapore-UK double taxation agreement), and stating that any gains would be subject to Capital Gain tax rate. This is how I treated those Singapore REIT dividends on my 21-22 tax return. I’ve kept a screenshot of HMRC Admin 19’s answer, but I can’t find it anymore when I search the site. Can HMRC therefore please confirm that this tax treatment of Singapore REITs dividends as foreign dividends rather than income is still correct for this tax year? (Indeed, as per the Investment Funds Manual quoted by HMRC Admin 17 they clearly don't come under the definition of an offshore fund, being "closed-ended arrangements that do not have a limited life", and similar to UK REITs). Thank you for confirming.

Hi TipTopKaf,

IFM21005 advises that "A Real Estate Investment Trust (REIT) is a vehicle that allows an investor to obtain broadly similar returns from their investment, as they would have, had they invested directly in property.  

In the hands of the shareholder, property income distributions (PID) are taxable as profits of a UK property rental business2. 

The PID is received net of withholding tax, unless it is to a recipient entitled to gross payment" 

SAIM5330 advises that REITs are generally taxed as profits of a UK property business, with 20% tax deducted. 

The income would be declared on SA106, page F2 "Income from overseas sources".

You can read the guidance here  IFM21005 - Real Estate Investment Trusts : Background: Introduction

Thank you

 

Dear Admin 5, Thank you for your reply confirming we should use SA106, Page F2 “ income from overseas sources” to declare our Singapore REIT dividends (about 7000 pounds/year). Could you please just be a bit more specific as we can’t see any PID box on page F2. Do we therefore enter our Singapore REIT dividends under “Dividends from foreign companies” and mention they are from Singapore REITs in the additional information notes? Many thanks in advance for confirming.

Hi TipTopKaf,
Yes, you are correct. 
Thank you.