Real Estate Investment Trust

REIT - Real Estate Investment Trust

Investing in Real Estate Investment Trusts REIT allows you to invest in commercial property with other people wishing to do the same without the need personally or physically to invest in bricks and mortar.  Real Estate Investment Trusts REIT are public limited companies and issue a fixed number of shares.   You can then buy shares in the company.  This is why, unlike Unit Trusts and OEICs, they are classed as 'closed ended'.  Share prices can obviously fall as well as rise.

Provided certain conditions are met such as:

• REIT must hold 3 properties - none owner occupied
• Not more than one property worth 40% or more of fund
• 75% of profits must be generated from rental income
• 90% of profits must be paid out to shareholders

The investment fund itself then grows tax free on its rental income business.

Lump sum investments: Yes

Regular premiums allowed: Yes

Flexible payments allowed (stop/start/additional/increase/decrease): Yes

Investment Risk Profiles Available:

• Lower risk funds available
• Medium risk funds available
• Medium to high risk funds available
• High risk funds available

Changing funds and risk profile allowed: No

Moving to another company allowed: No

Life Insurance Included: No

Personal Tax Benefits:

• REIT fund grows free of taxes
• Capital gains tax free only up to yearly allowance
• 20.00 % income tax (witholding tax) at source - can be reclaimed by non tax payers
• Basic rate tax payer (20.00 %) has no further liability to income taxes
• High rate tax payer (40.00 %)  subject to further 20% on income
• Additional rate rate (45.00 %) subject to further 25% on income
• ISA or pension and companies can invest in REIT capital gains tax free and no witholding tax

Can be held inside Trust: Yes

Suitable for:

• Children
• Adults
• Business
• Trusts
• Charities
• Pension Fund Investment
• Non Tax Payers
• Basic Rate Tax Payers