It'll be all REIT on the night!

Discussion in 'Finance, Property, Law' started by BiscuitsAB, Aug 18, 2012.

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  1. BiscuitsAB

    BiscuitsAB LE Moderator

    What with the recent run in with Forces Wealth Network and their view on Transferring your AFPS benefits to a SIPP and buying Alternative investments. I thought maybe it was about time to make the finance forum a bit more pro active.

    So along with answering enquiries I thought we could do look at some other areas, starting with some of the alternative investments that are around.

    First port of call are REITs (Real Estate Investment Trust)

    A REIT is really only a tax designation its a way of owning property within a company and have a reduced tax liability. For the general public they offer another way of buying into commercial property. If you choose to buy shares in a REIT you will not be buying into an individual property but instead putting your money into a fund which buys properties for letting purposes. This eliminates the risks associated with ‘having all your eggs In one basket’ as the fund will own various properties, potentially over various sectors of the property market. So, effectively, you will own lots of tiny slices of many properties. So buying into a REIT is essentially the same as investing in any company but one that specifically owns and manages income-producing property.

    The legislation laying out the rules for REITs in the United Kingdom was enacted in the Finance Act 2006 and came into effect in January 2007 when nine UK property companies converted to REIT status, including five FTSE 100 members at that time: British Land, Hammerson, Land Securities, Liberty International and Slough Estates (now known as "SEGRO"). The other four companies were Brixton (now known as "SEGRO"), Great Portland Estates, Primary Health Properties and Workspace Group.[18]

    British REITs have to distribute 90% of their income. They must be a close-ended investment trust and be UK resident and publicly listed on a stock exchange recognised by the Financial Services Authority.

    If you want to know more go to REITA, which was set up by the industry to provide information.

    Reita - UK REITs - Real Estate Investment Trust and property investment portal


    As with any investment, if this is something you may consider ensure you are aware of all the pro's and con's and happy with the risks associated with them.