17-02-2024, 01:48 AM
(This post was last modified: 17-02-2024, 01:54 AM by specuvestor.)
Yes I think too it is regrettable that the managers choose all cash rather than partial
Just for my understanding as I didn't read into KORE's announcements, I think REIT distribution is based on Distributable Income not Net income. In other words the clause on Net income is to alert the manager and trustee to be prudent in the distribution.
Then there is this section 5.3 on 90% of TAXABLE income to be paid out to enjoy tax transparency
https://www.iras.gov.sg/media/docs/defau...9897e04_27
So I figured that if you don't distribute 90% of your taxable income, the unit holders will have to pay tax on the income which is where the W8BEN comes in. So that's a consequence not the reason for not distributing
I'm also thinking about what r0n mentioned about income and asset being overseas. But in order to receive the past distribution the income would have to be repatriated onto Singapore's shores and that would be under IRAS tax transparency umbrella?
Eager to learn from other VB on this REIT topic
Just for my understanding as I didn't read into KORE's announcements, I think REIT distribution is based on Distributable Income not Net income. In other words the clause on Net income is to alert the manager and trustee to be prudent in the distribution.
Then there is this section 5.3 on 90% of TAXABLE income to be paid out to enjoy tax transparency
https://www.iras.gov.sg/media/docs/defau...9897e04_27
So I figured that if you don't distribute 90% of your taxable income, the unit holders will have to pay tax on the income which is where the W8BEN comes in. So that's a consequence not the reason for not distributing
I'm also thinking about what r0n mentioned about income and asset being overseas. But in order to receive the past distribution the income would have to be repatriated onto Singapore's shores and that would be under IRAS tax transparency umbrella?
Eager to learn from other VB on this REIT topic
(16-02-2024, 01:29 PM)Shiyi Wrote:(15-02-2024, 08:18 PM)specuvestor Wrote:(15-02-2024, 07:19 PM)r0n Wrote:(15-02-2024, 05:24 PM)Shiyi Wrote: KORE's distributable income in the second half comes to US$26,111k.
I thought Reit is obliged to distribute at least 90% of the income? Instead, the DPU is suspended.
Can anyone enlighten me?
That is if you want to get tax transparency treatment from IRAS. However their income and assets are based overseas and they will not benefit from it.
Not obliged but incentivised to take advantage of the tax shelter but astounding point on overseas income is not subject to the shelter
Thank you for the explanation.
I take another look at the announcement. It appears that the DPU is suspended has little to do with tax shelter. Rather, its net income after accounting for fair value losses is negative.
The announcement has a footnote in small print:
"... paragraph 7.3 of Appendix 6 to the Code on Collective Investment Schemes (“Property Funds Appendix”) which states that if “the manager declares a distribution that is in excess of profits, the manager should certify, in consultation with the trustee, that it is satisfied on reasonable grounds that, immediately after making the distribution, the property fund will be able to fulfil, from the deposited property of the property fund, the liabilities of the property fund as they fall due."
(16-02-2024, 02:00 PM)CY09 Wrote: Hi,
I have enquired with Manulife US REIT on the effects of taxation after suspension of dividends. It is stated as below:
".....that actually there is no withholding tax impact on halting distributions, if all unitholders continue to submit their W8BEN forms. In the past, unitholders would incur withholding tax when they failed to submit their tax forms. Since the Manager is retaining the redistributions, the withholding tax burden of as much as 43% would fall on the REIT now instead of unitholders, and it will be calculated according to the percentage of unitholders that fail to submit their tax forms. Therefore, we will be doing investor education to remind unitholders to continue to submit their tax forms even in the absence of distributions until end-2025. You may refer to page 4-5 to the Circular for further details."
Effectively, you can see which REIT was proactive in sending W8BEN forms to know if they plan to withhold distributions. I received W8BEN form from KORE 2 weeks ago which suggested their plans. As for PRIME REIT, I have not received the W8BEN form which may suggest they dont intend to suspend dividends just yet
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
Think Asset-Business-Structure (ABS)
Think Asset-Business-Structure (ABS)