Jersey: UK Real Estate Investment Trusts (Reits) – Using Jersey Companies And The International Stock Exchange (TISE)

Last Updated: 9 October 2017
Article by Daniel Richards, Raulin Amy, Niamh Lalor and Peter Longstaffe

Most Read Contributor in Jersey, March 2019

UK real estate investment is considered by many to have a positive and significant track record of attracting investment flows as an alternative asset class for institutional investors such as pension funds, insurance companies, sovereign wealth funds and private equity for both UK-based investors and internationally.

Structuring using Jersey companies and/or listing on TISE is an attractive alternative for REITs

What is a UK REIT?

A UK REIT is a real estate investment business that meets eligibility criteria set out by the UK tax authority, Her Majesty's Revenue and Customs (HMRC).  These eligibility criteria include that:

  • the property investment business be structured as a company (or group of companies) which is tax resident in the UK
  • the principal purpose of the business is real estate investment, either in UK or international real estate and specifically,
    • at least 75% of the business's profits are derived from real estate rental income, and
    • at least 75% of the business's gross assets comprise cash or assets involved in real estate rental investment business.
  • shares issued by the REIT must be either listed on or admitted to trading on a "recognised stock exchange", "recognised" by HMRC under the UK Income and Corporation Taxes Act 2007 (ICTA).  This includes TISE as a recognised exchange as well as the London Stock Exchange.

What are the advantages to investors of a UK REIT?

Investment in a UK REIT provides investors with investment returns directly correlated to an investment return on the UK commercial (or residential) property rental market on a tax efficient, risk diversified, pooled investment basis.

Although a UK tax resident company, a UK REIT delivers an investment platform which the UK framework has made exempt from double taxation, i.e. it is effectively tax transparent for its investors so moves the point of taxation from the Company to the investor.

A UK REIT is exempt from UK corporation tax on both the income profits and capital gains derived from the REIT's UK qualifying property rental business.  Profits (income and gains) of the property rental business are exempted from tax, but distributions of those profits to investors as dividends are taxed in the hands of the investors.

UK REITs must distribute not less than 90% of their taxable income in each accounting period to investors.  Investors are taxed under the laws applicable to their own tax residency with UK taxation (in relation to international investors) being treated as taxation on property rental income and are therefore subject to a UK withholding tax at the UK basic rate of income tax for non-exempt investors.  Exempt investors such as charities, UK companies and pension funds can register to receive UK REIT distributions of income gross rather than are subject to withholding tax.

Liquidity in secondary market investment in UK REITs is further enhanced by differential rates of UK transfer tax applicable to UK companies. Investment in shares issued by a UK incorporated REIT will incur UK stamp duty of 0.5%, in contrast to UK stamp duty land tax on direct investment in UK commercial property of 5%.

The original UK REIT framework included a conversion charge of 2% for existing real estate investment businesses converting to REIT status and a requirement for a spread of investor ownership.  To increase the attractiveness of the REIT as a real estate investment platform, the UK has abolished both of these requirements.  No conversion charge now applies and the spread of ownership rules no longer apply restrictively to institutional investors.

UK REITs can also now be wholly owned by one or a small number of institutional investors.

Recognised Stock Exchanges - The International Stock Exchange

A quarter of all UK REITs are listed on TISE.  A TISE listing enables a real estate investment group to meet this requirement for UK REIT status with the advantage of significant cost saving and operational efficiency.

Initial and annual fees are highly competitive being set currently at £5,000 on application for a primary listing for a closed-ended investment vehicle such as a UK REIT with annual listing fees of £2,000 for such issuers.

TISE also has a responsive approach, deliberately fostering strong relations with listing sponsors and whose listing and membership committee meets daily to consider applications.  This ensures that well-constructed listing applications can be progressed to admission to listing in 4-6 weeks.

TISE's business-orientated approach is demonstrated by its adaptation of the generally applicable rules as to free float in the shares of listed investment companies.  The general rule, that at least 25% of such listed companies' shares be held in public hands, has been disapplied in relation to REITs.  This complements the UK's abolition of restrictions on ownership concentration for institutional investor REITs.

Therefore, joint venture, club investment or single institutional investor REITs can be listed on TISE.

TISE applies globally recognised stock exchange listing standards, based on London market norms, in a manner which is pragmatic, proportionate and adaptable to the needs of individual investment businesses.  The investor protection standards applied by TISE have been recognised internationally by the International Organisation of Securities Commissions (IOSCO) and the World Federation of Exchanges both of whom have granted TISE affiliate member status.  In addition to being recognised by UK HMRC for the purposes of UK REIT eligibility, HMRC recognition also applies for the purposes of long-term investment products for UK private individuals' self-invested personal pensions and individual savings accounts.  TISE has also been accorded recognition from the German national financial services regulator, BaFin, enabling German mutual funds to invest in TISE listed securities and by the Australian Stock Exchange.

As at Q2 2017, the total value of TISE listed securities stood at circa £400 billion and the total number of listed securities stood at circa 2,400, with a year-on-year increase in applications of 45%.

Listing Sponsor

All applications for admission to listing on TISE and for continuing eligibility purposes require the support of a listing sponsor authorised to act as such by the Exchange.

Ogier Corporate Finance Limited (OCFL) is the leading listing sponsor on TISE.

Listing process

  1. Satisfy listing conditions

A UK REIT applying for TISE admissions to listing must satisfy all conditions for listing or receive specific derogation consent from individual conditions where appropriate.  The issuer, its professional advisors and OCFL will work together to ensure the suitability of the proposed listing prior to formal application.

This listing will be under chapter 7 of the Listing Rules of TISE which generally covers investment funds but, in the absence of a specific chapter for REITS, this chapter is used and the REIT is treated similarly to a very provide fund if it a joint vehicle, with appropriate derogations being granted.

A non-exhaustive list of factors to consider include:

  • Disclosures

The Listing Document must contain sufficient information to enable investors to make an informed assessment of the REIT and its listed securities.  This generally applicable rule is supplemented by specific disclosure requirements.

  • Directors

TISE must be satisfied, on review of individual director declarations, that

  • the directors have sufficient and satisfactory investment management experience of real estate investment business
  • the directors can demonstrate the ability to act independently of any investment manager which may be appointed
  • if the REIT is a non-regulated vehicle, management must comply with published TISE policy in guidance notes
  • the board must comprise a minimum of three directors, of whom at least two must be independent of any investment manager, investment advisor or related party
  • the directors will be responsible for the information in the Listing Document which will state that responsibility and be signed by them
  • Investment
    • The REIT must invest with the aim of spreading risk.
  • Listed Securities
    • The listed securities must be freely transferable, unless specific derogation is granted by TISE, and a minimum market capitalisation of £500,000 be achieved.
  • Accounts

The issuer must prepare (in accordance with its applicable national law) audited accounts which:

  • cover at least three years (and the period to which the accounts relate must not end more than twelve months prior to the date of the Listing Document), subject to any specific derogation granted;
  • are consolidated accounts prepared in respect of the issuer and all its subsidiaries (if an issuer is required to prepare consolidated accounts under its chosen GAAP);
  • have been prepared and independently audited in accordance with the TISE policy and (subject to that policy) have been reported on by the auditors without qualification

          2.  Preparation of application

OCFL in conjunction with the REIT's professional advisors will prepare drafts of the formal listing documentation for review and comment by TISE, as follows:

  • formal application for listing;
  • sponsor's declaration;
  • directors declarations;
  • listing document signed by or on behalf of the directors of the issuer;
  • any necessary application for derogation(s) from particular listing requirements;
  • financial statements; and
  • accountants' report and any statement of adjustments.

         3.  Approval

Once TISE's listing department is satisfied with an application it will prepare a recommendation as to the suitability of the listing proposal to TISE's listing and membership committee.

         4.  Listing

If the listing and membership committee approves the application, the listing documentation is signed and filed and the securities are admitted to the Official List.  Scanned copies are sufficient and there is no need to provide originals.

Continuing obligations

Once listing has occurred, the REIT must comply with the continuing obligations specified in TISE's listing rules.  The continuing obligations are intended to ensure that all market users have simultaneous access to the same information and to maintain an orderly market in the listed securities. 

This client briefing should be read in conjunction with our briefing entitled "The International Stock Exchange (formerly known as The Channel Islands Securities Exchange Authority Limited or CISEA) – Continuing Obligations for issuers with listed Investment Vehicle Securities", which contains a detailed summary of these continuing obligations.

Are all UK REITs also UK incorporated companies?

Although it is a requirement that a UK REIT be a company and be tax resident in the UK, this does not necessarily mean that the company itself must be incorporated under the UK Companies Act 2006.

Of the UK REITs which are admitted to listing on TISE at the date of this briefing, +50% are companies incorporated in Jersey, but managed and controlled in the UK. 

The tax laws of both Jersey and Guernsey expressly confirm that companies incorporated in either jurisdiction will be solely tax resident in the UK if managed and controlled in the UK and UK tax resident under UK law.

Jersey companies law closely follows England common law but has also adopted useful innovations.  Notably, in connection with a UK REIT's obligation to distribute 90% of its real estate investment income profits in each accounting period, Jersey and Guernsey companies law provides for distributions to be authorised on a cash-flow solvency basis, rather than on the basis of distributable profits and reserves, which can provide a more practicable and realistic accounting basis for distribution decisions. 

In addition, Jersey and Guernsey companies laws recognises cell companies, enabling the statutorily ring-fenced, differential treatment of different asset pools where commercially appropriate.  It is also the case that no stamp duty is payable on subscription, transfer or redemption of shares in Jersey and Guernsey incorporated companies.

Wherever incorporated, specific advice should be obtained by the REIT's board in relation to cross-border investor marketing and any applicable regulatory requirements under the applicable law of its' domicile.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions