Tax dispute may derail Big Yellow’s Reit plans

, the self-storage group, has warned that its plans to
convert to a tax-efficient real estate investment trust could end in ruins
following a tax dispute with HM
Revenue & Customs

In a trading statement the group said that it was involved in a dispute with
HMRC over whether it should be allowed to convert to a Reit.

According to the FT
the problem arises over changing the status of Big Yellow’s income
from Schedule D to Schedule A, a necessary requirement to qualify for Reit

Historically Big Yellow, which owns 42 lock-up storage facilities across the
UK, declared its earnings as trading income, which falls within the Schedule D

Given that the company is now mainly property based, chief executive Jimmy
Gibson argued that the group should be able to report earnings as Schedule A
rental income.

Gibson said: ‘There are inconsistencies in the industry with certain
companies being treated as Schedule A and others as Schedule D. Our competitors
could therefore choose to become Reits, so why can’t we?’

Further reading:

HMRC scales back REIT rules

Q&A: REIT here, right now

Slough to confirm REIT status

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