KPMG Corporate Finance will act as sponsor to Glenstone Property Plc which listed on the CISX on 28 October 2008.
The company has its beginnings over 30 years ago essentially as a family-owned company and it is relatively small compared to those large property companies listed on the LSE. Its aim, with the advice of KPMG Tax Advisors in the UK, is to become a REIT and it will become the first REIT to be listed on the CISX.
The REIT regime, introduced in the Finance Act 2006, is intended to encourage greater investment in the UK property market.
A UK resident company which is a REIT does not pay UK corporation tax on its income and capital gains from its qualifying property rental business (the ”Tax-Exempt Business”) provided that certain conditions are satisfied. Instead, distributions in respect of the Tax-Exempt Business will be treated for UK tax purposes as UK property income in the hands of shareholders.
There are a number of conditions to be satisfied to qualify as a REIT and there are two that specifically concern the CISX:
-The ordinary shares of the company (or principal company in a group) must be listed on a Recognised Stock Exchange. HM Revenue and Customs maintains a list of recognised stock exchanges which includes the Channel Islands Stock Exchange.
-The company must not be a ”close company”. This condition is automatically satisfied if not less than 35% of the company’s/principal company’s ordinary shares are listed on a recognised stock exchange and beneficially held by the public. Such shares must have been the subject of dealings on the stock exchange within the preceding 12 months.
L.D.