Consultation outcome

Including Real Estate Investment Trusts (REITs) as 'institutional investors'

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

This consultation has concluded

Detail of outcome

The informal consultation was launched on 20 March 2013 and closed on 14 June 2013. The government received a total of 13 written responses from stakeholders representing existing UK and foreign REITs, tax advisors and UK and foreign property industry associations.

Having analysed the responses to the consultation and assessed the potential implications for tax receipts and the wider impact on the REIT regime, the government considers that the measure will provide benefit to the REIT sector in terms of facilitating joint ventures and providing UK REITs access to more financing opportunities and has therefore decided to include REITs within the definition of “institutional investor”. By attracting more international and institutional capital into the UK the measure is expected to result in a more competitive and efficient UK real estate and REIT sector.

Original consultation


Seeking views on Real Estate Investment Trusts (REITs) being included within the definition of 'institutional investor'.

This consultation ran from

Consultation description

On 20 March 2013 the Chancellor of the Exchequer announced that the government would further consider the case for Real Estate Investment Trusts (REITs) being included within the definition of ‘institutional investor’.

This announcement follows on from recommendations received during the formal consultation on two possible reforms to the REIT regime which took place between 4 April and 27 June 2012:

  1. the tax treatment of REITs investing in REITs
  2. the potential role social housing REITs could play to support the social housing sector

The consultation

The government is interested in hearing from all stakeholders to assess the potential appetite for including REITs as “institutional investors” and the potential tax risk of such a measure. Responses to the specific questions listed below are welcomed. Where possible stakeholders are encouraged to provide evidence to support specific points.

  1. How would this measure be beneficial to your investment model?
  2. How much appetite is there in foreign and UK REITs to hold majority shareholdings in UK REITs?
  3. What would be the impact of this measure in bringing additional investment (including foreign investment) into the REIT regime?
  4. What practical issues that affect implementation should be considered, including avoidance risk? How can these be addressed?
  5. How would this measure fit in with Double Taxation Agreements, particularly those with an effective rate of less than 15% (for holdings of 10% or less)? Would this measure generate risk of tax loss from the increased ability of foreign REITs to invest in UK REITs? How could this risk be minimised?
  6. What other risks to the REIT regime could arise from including REITs as “institutional investors”? How can these risks be minimised?

Contact us

After the consultation period has closed, the Government will consider the responses to the consultation.

Published 20 March 2013
Last updated 10 December 2013 + show all updates
  1. Consultation response information added
  2. First published.