DT Agreements: Hong Kong - Income from a UK source paid to a resident of Hong Kong
A UK Real Estate Investment Trust (UK-REIT) is a company which is in the property rental business. It must be resident in the UK and be listed on a recognised Stock Exchange.
A UK-REIT is obliged to distribute most of its profits from its “qualifying property income” as Property Income Dividends (or PIDs).
Although a UK-REIT pays no tax on its qualifying property income, it must withhold tax at the basic rate - currently 20% - when paying a PID.
Equally, Property Authorised Investment Funds (PAIFs) also pay PIDs with UK tax withheld.
Certain residents of Hong Kong who are investors in a UK-REIT or a PAIF will be able to claim repayment of tax that has been deducted from a PID:
- The DTC allows full relief from UK tax on PIDs beneficially owned by a pension scheme resident in Hong Kong.
The DTC allows relief from UK tax down to 15% of the gross PID where the PID is beneficially owned by