Real estate investment trust (REIT)
In this lesson, you'll learn how real estate investment trusts (REITs) are taxed and why HMRC treats them differently from other investments.
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In this lesson
- 0:00 What is a real estate investment trust?
- 1:02 How HMRC treats REIT dividends as property income
- 1:57 Calculating tax on REIT dividends: worked example
About this lesson
REITs own and manage properties on behalf of investors, but instead of receiving dividends taxed at lower rates, HMRC views REIT dividends as property income—taxed at the same rates as if you owned the property directly. This is crucial for TX and ATX papers: when you see a REIT dividend in an exam question, treat it as non-savings property income, gross it up by dividing by 0.8 to account for the basic rate tax already paid, and include it in your non-savings income column rather than the dividend column. You'll work through a practical example showing how to calculate tax payable when a taxpayer receives trade income, savings income, and REIT dividends, ensuring you apply the correct tax rates and claim the appropriate tax credit.
Duration: 4m
Transcript
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