The Chancellor Gordon Brown has relaxed UK REIT rules by allowing companies that have less than 75% of their assets in property into the regime.
The Pre-Budget Report said that newly established companies will be allowed to register as REITS.
It says: ‘This change will allow companies to enter the UKREIT regime without meeting the requirement that at least 75% of their business by assets and income consists of property rental activity, provided that they meet this condition within one year of entry.’
The report says that the entry charge of 2% of the gross market value of investment properties will be levied at the end of this first year, on the value of properties held at that point.
The government will also shortly publish information on a number of technical changes to be made in Finance Bill 2007.