Does your charity have any investments in a Real Estate Investment Trust?
The tax treatment of dividends received from Real Estate Investment Trusts (REITs) is different to dividends received from an ordinary company. The dividend could comprise two elements. One part would be an ordinary dividend and the other element is a PID (Property Income Distribution). The non-PID element of the dividend is treated exactly the same as other dividends in that it has an associated tax credit which cannot be reclaimed. However, the PID element is treated as property letting income from which withholding tax at the basic rate is deducted.
HM Revenue & Customs has advised that certain classes of shareholders (including charities) may be able to claim exemption from deduction of withholding tax. In order to help cash flow, it is suggested that charities should claim such an exemption so that they do not have to wait for the basic rate tax deducted to be repaid.
If you require any assistance in claiming this exemption please contact Richard Limburg or complete and return the online form below.