No. of Recommendations: 4
> unlike UK common stock dividends, these reits send 'PIDs' which with-holds taxes for americans.
What follows should not be considered advice or tax advice, it's just my own opinion of some issues here.
1. I agree it's very important to look into taxation of any asset, especially foreign assets most of all, for your own local situation and tax wrapper situation, before investing in anything.
2. Some REITs (Segro, Sirius, Unite) have paid a mix of PIDs and regular dividends. Across the sector as a whole I think it's about 15-20% regular dividend and 80-85% PIDs.
3. For Europeans and Brits etc, holding the Irish IUKP ETF, you could simplify things a bit in relation to taxation and international taxation. But see below, point 4.
4. US investors should look into stuff like PFIC rules before investing in anything that looks like an ETF outside of the USA. It's not great.
e.g.
https://creativeplanning.com/international/insight...5. I have heard that investors in the US, and some european countries, can often reclaim a quarter of the UK REIT withholding tax (20% -> 15%) via tax treaties. It seems to be hassle though, requiring a form and evidence.
6. This withholding issue goes both ways, US dividends (on everything) have 15-30% withholding taxes for foreign investors (though I think SIPPs, pension funds etc have an exemption? not sure).
7. IUKP, the ETF I mentioned, doesn't have very many holdings and can be 80%+ replicated with a few individual securities if that suits someone's interests.
8. For US investors interested in non-US stocks, perhaps IUKP might be more useful as a starting point for further research into individual stocks.
9. For a stock at the right price, sometimes a withholding tax can be worth paying. For example:
I believe US REITs, valued on price/FFO (lookthrough) earnings, are 15-18x (-ish, currently)
I believe EU REITS, valued on price/EPRA (lookthrough) earnings, are 13.5-15x ""
I believe UK REITS, valued on price/EPRA (lookthrough) earnings, are 11.5-13.5x ""
10. There's an index that some EU and US ETFs follow, FTSE Nareit All Equity REIT, for global property exposure.
