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HMRC internal manual

International Manual

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

    • Individuals
    • Companies