TaxCorporate TaxEnterprise Inns discusses REITs with HMRC

Enterprise Inns discusses REITs with HMRC

Pub group in talks with HMRC about possibility of changing its tax status

Enterprise Inns, the owner of
7,500 pubs, is in talks with HM Revenue &
Customs
over the possibility of converting to a
Real Estate
Investment Trust (REIT)
without having to split the business in two.

According to reports, the company is hoping the entire group can convert to a
more tax efficient REIT.

To do so would require the company to distribute 90% of profits to
shareholders and it must generate 75% of income from rent.

Discussions with HMRC are focusing on what the definition of rent ‘income’
is.

According to some analysts, if beer sales to tenants are allowed to be
interpreted as a form of rental income, REIT conversion is possible.

Further reading:

HMRC scales back REIT rules

KPMG publishes first UK REITS guide

Q&A: REIT here, right now

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