UK to limit corporate ownership of REITs

The UK government has decided to limit corporate ownership of real estate investment trusts (REITs), while allowing private investors, trusts and funds unrestricted purchases, according to merchant bank Kempen & Co.

The Cabinet is setting a 10% ceiling on corporate ownership of REITs to prevent companies from using double-taxation treaties to shelter payments on received dividends.

It was originally planned to limit all investors to a maximum of 10%. But a Treasury spokesman said that in order to protect the Exchequer, the rule need only apply to corporate shareholders. 'The listing requirement and close company rules - that the company cannot be controlled by five or fewer shareholders - will ensure the government's objectives for wide ownership of REITs are met.'