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Introduction to REITs

D7.1101 Real estate investment trusts (REITs)—overview

The legislation¹ described in this Division details the special regime in the UK for real estate investment trusts (UK REITs). A 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.

This regime shifts the burden of taxation of property rental business from the company that carries on the business to the shareholders that invest in the company to improve the efficiency of both the commercial and residential property investment markets.

The aim is to provide the basis for liquid and publicly available property investment vehicles available to a wide range of investors, contributing to the government's wider objectives for raising productivity in the commercial property sector. A further aim is to encourage increased institutional and professional investment to support the private rented sector².