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Measure
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Issues for discussion
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Overarching issues
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- What do you expct is the anticipated impact of these measures on (i) existing REITs; and (ii) potential new REITs (including residential REITs)?
- What do you expct is the impact of these measures in bringing additional investment (including foreign investment) into the REITs regime?
- What do you expct is the impact of these measures in supporting good business practice?
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Introduction of a diverse ownership rule for institutional investors
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- What do you expect the impact of this measure to be? (If possible please could you provide evidence, theoretical or empirical, to support your answer)
- How should “diverse ownership” be defined? Why? (If possible please could you provide evidence to justify your recommendation)
- How should “institutional” investor be defined? Why? (If possible please provide evidence to justify your recommendation )
- What are the alternatives for institutional investors wanting to invest in property?
- What other benefits are there for institutional investors to joining the REIT regime?
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Introduction of a fixed grace period for new REITs to meet the non close company requirement
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- What do you expect the impact of this measure to be? (If possible please could you provide evidence, theoretical or empirical, to support your answer)
- How long should the grace period last? Why? (If possible please provide evidence to justify your recommendation)
- What should be the minimum number of shareholders at the start of/during the grace period?
- How would you prepare to meet the non close company requirement during the grace period?
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Allow listing on alternative exchanges, such as the UK Alternative Investment Market (AIM) or EU Multilateral Trading Facilities
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- What do you expect the impact of this measure to be?
- From your business perspective, approximately how much would it cost to list on a smaller foreign RSE compared to AIM/PLUS in the UK?
- From your business perspective, what are the pros and cons of listing on a smaller foreign RSE compared to listing on a non RSE in the UK?
- From your business perspective, how does listing on AIM compare to listing on other multilateral trading facilities?
- What are the regulatory issues that need to be considered?
- How can individual investors be protected under a relaxed listing requirement?
- To what extent does AIM (or its equivalent) narrow the potential investor base?
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Abolition of the conversion charge for companies joining the REIT regime
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- What do you expect the impact of this measure to be? (If possible please could you provide evidence, theoretical or empirical, to support your answer)
- How much does the removal of the conversion charge increase the tax incentives in joining the regime?
- To what extent will this measure incentivise new investment rather than acquisition of existing property investment companies?
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Allow cash to be a ‘good’ asset for the purpose of the REIT balance of business asset test.
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- Should there be an absolute or a proportional value of how much cash can be held under the balance of business test?
- What should be the time limit for holding cash?
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Extension of the time limit for complying with the distribution requirement in particular circumstances involving stock dividends.
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- How will your business benefit from this measure?
- What is the admin burden of making a dividend payment outside the regular payment cycle?
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Redefinition of the ‘financing costs’ for the REIT interest cover test
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- Which items should we include/not include?
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