Devil in REITS detail, industry says

New tax-efficient vehicles for property companies may not function
effectively in the forms the government has proposed, leading figurers from the
property industry have warned.

Treasury plans for Real Estate Investment Trusts – which stipulate that no
one investor can hold more than 10 per cent of each trust – mean that the funds
will limit M&A activity and make them inflexible, according to Francis
Salway, chief executive of Land Securities.

Salway was quoted in The Times today saying: ‘The rules would affect
corporate activity and stakebuilding. How would you get efficient M&A
activity, which is critical to efficient capital markets?’

The property industry is lobbying for last-minute changes to the format of
the trusts, which will allow users to avoid capital gains tax and tax on rental

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