UK REITs and Private Equity Real Estate Funds: Structuring Considerations

Short summary

UK law changes in 2022 enabled private PE managers to use unlisted REITs for UK real estate, creating tax efficiency by converting 25% corporation tax into 20% withholding tax on investor distributions. Investor returns vary by tax status—sovereigns and pension schemes can reclaim withholding tax for effective 0-15% rates. Luxembourg structures now face higher UK taxation on indirect real estate disposals, making UK REITs more competitive.

• •Private UK REITs now available for PE managers via 2022 law changes
• •Tax arbitrage: 20% withholding vs 25% corporation tax rate
• •Investor returns depend on tax status and treaty eligibility for withholding reclaims

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