Capco converted to a REIT on 9 December 2019 and maintains its primary listing status on the London Stock Exchange and secondary listing status on the Johannesburg Stock Exchange.
A REIT is a UK listed property investment company, which is exempt from UK corporation tax on income profits and capital gains that arise from its qualifying property rental business (subject to certain conditions being met, as set out in the UK-REIT legislation).
As a UK REIT, Capco will be required to distribute at least 90 per cent. of its taxable property rental profits to shareholders as Property Income Distributions (“PIDs”). The taxation of a PID differs from the tax treatment of normal dividends (“Non-PID”).
PIDs are generally treated in the hands of shareholders as UK property rental profits and will be paid to shareholders net of withholding tax (basic rate UK income tax which is 20 per cent for the 2019/20 tax year). In general the withholding tax provisions on PIDs will apply to all individual and non-UK resident shareholders (some non-UK resident shareholders may be able to apply for the repayment in whole or in part of tax deducted, pursuant to the application of a relevant double taxation convention).
Certain classes of shareholder can receive PIDs gross. The categories of shareholder which generally qualify for exemption from the REIT UK withholding tax includes:
- UK Companies
- Local Authorities
- UK Pension Schemes
- Managers of PEPs
- ISAs and Child Trust Funds
An exemption from the application of withholding tax to PIDs can be claimed by completing the relevant declaration form below and returning it to Capco’s UK registrar:
Link Asset Services,
34 Beckenham Road,
Kent BR3 4TU
Any distributions from Capco’s residual (non-exempt) business will continue to be paid as normal dividends. PIDs and normal dividends (“Non-PID”) can take the form of cash or scrip dividend alternative. A scrip dividend alternative will continue to be offered to shares subject to the relevant authorisations being obtained.
Information on taxation of UK and South African shareholders under the REIT regime can be downloaded here. This information is included only as a general guide for shareholders based on the Company's understanding of the law and the practice in force at the date stated on the document, and Capco accepts no liability for its contents. Shareholders should seek independent tax advice if they are in any doubt of the implications of Capco’s REIT status on their tax position.