Enterprise wins REIT status
Pub giant Enterprise Inns has been granted permission to convert into a Real Estate Investment Trust (REIT) and is now deciding if it will change its internal structure to meet the criteria.
Enterprise, which owns around 7,700 tenanted pubs, has been in discussions with HM Revenue and Customs (HMRC) for the past year over the definition of a REIT- which allows companies to invest in new property without paying corporation tax.
The discussions have centred on rules that those looking for REIT status can only convert if they make no more than 25% of their income from non-property sources.
HMRC does not define beer sales and property rent as a combined income.
Enterprise said it expected a review with its tax, legal and financial advisers about the prospects of a conversion to take several months to complete.
Rival operators have ruled out similar property based deals in the short-term and it remains to be seen if they will follow in Enterprise's footsteps.
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By Christopher Walton
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