§ 14ZI — Deduction for real estate investment trust units held by managers of real estate investment trusts

14ZI.—(1) This section applies for the purpose of ascertaining, for the basis period for the year of assessment 2026 or a subsequent year of assessment, the income of a REIT manager.(2) Despite any other provision in this Part, where a REIT manager transfers any REIT units to an employee as remuneration, the amount deductible under section 14(1) for the REIT manager in respect of such remuneration is to be computed in accordance with subsections (3) to (6).

(3) Subject to subsection (4), the amount deductible is the value at receipt of the REIT units transferred to the employee, less any amount payable by the employee for the REIT units.

(4) Where any amount of profit, loss or expense of the REIT manager (as a qualifying person under section 34AA) in respect of the REIT units transferred to the employee had been previously brought into account for the purposes of sections 10, 14 and 37 in accordance with section 34AA, the amount deductible is to be adjusted by —(a)

adding the total amount of profit in respect of those REIT units which had been brought to tax under this Act by virtue of section 34AA; and

(b)

subtracting the total amount of loss in respect of those REIT units which had been allowed as a deduction under this Act by virtue of section 34AA.

(5) For the purpose of subsection (3), the value at receipt of the REIT units transferred to the employee is to be determined in accordance with one of the following methods:(a)

on the basis that the REIT units acquired by the REIT manager at an earlier point in time are deemed to be transferred first;

(b)

on the basis of the formula

where —

(i)

A is the number of REIT units transferred;

(ii)

B is the total number of REIT units held by the REIT manager immediately before the transfer; and

(iii)

C is the aggregate of the value at receipt of each of the REIT units in B;

(c)

on the basis that the aggregate value at receipt of all REIT units transferred to employees within a basis period, or a regular interval in a basis period, is ascertained by the formula

where —

(i)

D is the number of REIT units so transferred within that basis period or interval;

(ii)

E is the total number of REIT units held by the REIT manager at the end of the preceding basis period, or at the end of the period equal in length to the regular interval immediately preceding that interval, as the case may be;

(iii)

F is the total number of REIT units acquired by the REIT manager within the firstmentioned basis period or interval;

(iv)

G is the aggregate of the value at receipt of each of the REIT units in E; and

(v)

H is the aggregate of the value at receipt of each of the REIT units in F;

(d)

on any other basis that the Comptroller considers to be reasonable, taking into account all the circumstances of the case.

(6) Where a method in subsection (5) has been applied to determine the value at receipt of the REIT units transferred to the employee, that same method must be used to determine the amount of profit, loss or expense of the REIT manager in respect of those REIT units under subsection (4), and for this purpose —(a)

C in subsection (5)(b) is the aggregate amount of the profit, loss or expense of the REIT manager in respect of each of the REIT units in B in that provision;

(b)

G in subsection (5)(c) is the aggregate amount of the profit, loss or expense of the REIT manager in respect of each of the REIT units in E in that provision; and

(c)

H in subsection (5)(c) is the aggregate amount of the profit, loss or expense of the REIT manager in respect of each of the REIT units in F in that provision.

(7) Where a method in subsection (5) has been applied to determine the value at receipt of the transferred REIT units for the basis period of any year of assessment, the same method must be applied for that purpose for the basis period of any subsequent year of assessment unless the Comptroller agrees otherwise.

(8) In this section —“market value”, in relation to a REIT unit, means the amount that would be realised if the REIT unit had been sold on the open market or such other value as appears to the Comptroller to be reasonable in the circumstances;

“regular interval”, in relation to a basis period, means one of a number of equal periods within the basis period —(a)

where the aggregate of all of those equal periods is equal to the basis period; and

(b)

where the duration of each equal period —(i)

in a case where the REIT manager has previously been allowed a deduction under this section, is the one previously adopted by the REIT manager for the purpose of this section; or

(ii)

in any other case, is any duration adopted by the REIT manager for the purpose of this section;

“REIT” or “real estate investment trust” has the meaning given by section 43(10);

“REIT manager”, in relation to a real estate investment trust, means an entity which has been appointed to manage the property of, or operate, the real estate investment trust;

“REIT unit” means a unit in a REIT that a REIT manager has received from the trustee of that REIT as consideration for the services performed by the REIT manager in respect of that REIT;

“value at receipt”, in relation to a REIT unit, means the market value of the REIT unit when it was received by the REIT manager from the trustee of the REIT.[Act 35 of 2024 wef 27/11/2024]

—(1) This section applies for the purpose of ascertaining, for the basis period for the year of assessment 2026 or a subsequent year of assessment, the income of a REIT manager.

(2) Despite any other provision in this Part, where a REIT manager transfers any REIT units to an employee as remuneration, the amount deductible under section 14(1) for the REIT manager in respect of such remuneration is to be computed in accordance with subsections (3) to (6).

(3) Subject to subsection (4), the amount deductible is the value at receipt of the REIT units transferred to the employee, less any amount payable by the employee for the REIT units.

(4) Where any amount of profit, loss or expense of the REIT manager (as a qualifying person under section 34AA) in respect of the REIT units transferred to the employee had been previously brought into account for the purposes of sections 10, 14 and 37 in accordance with section 34AA, the amount deductible is to be adjusted by —(a)

adding the total amount of profit in respect of those REIT units which had been brought to tax under this Act by virtue of section 34AA; and

(b)

subtracting the total amount of loss in respect of those REIT units which had been allowed as a deduction under this Act by virtue of section 34AA.

(5) For the purpose of subsection (3), the value at receipt of the REIT units transferred to the employee is to be determined in accordance with one of the following methods:(a)

on the basis that the REIT units acquired by the REIT manager at an earlier point in time are deemed to be transferred first;

(b)

on the basis of the formula

where —

(i)

A is the number of REIT units transferred;

(ii)

B is the total number of REIT units held by the REIT manager immediately before the transfer; and

(iii)

C is the aggregate of the value at receipt of each of the REIT units in B;

(c)

on the basis that the aggregate value at receipt of all REIT units transferred to employees within a basis period, or a regular interval in a basis period, is ascertained by the formula

where —

(i)

D is the number of REIT units so transferred within that basis period or interval;

(ii)

E is the total number of REIT units held by the REIT manager at the end of the preceding basis period, or at the end of the period equal in length to the regular interval immediately preceding that interval, as the case may be;

(iii)

F is the total number of REIT units acquired by the REIT manager within the firstmentioned basis period or interval;

(iv)

G is the aggregate of the value at receipt of each of the REIT units in E; and

(v)

H is the aggregate of the value at receipt of each of the REIT units in F;

(d)

on any other basis that the Comptroller considers to be reasonable, taking into account all the circumstances of the case.

(6) Where a method in subsection (5) has been applied to determine the value at receipt of the REIT units transferred to the employee, that same method must be used to determine the amount of profit, loss or expense of the REIT manager in respect of those REIT units under subsection (4), and for this purpose —(a)

C in subsection (5)(b) is the aggregate amount of the profit, loss or expense of the REIT manager in respect of each of the REIT units in B in that provision;

(b)

G in subsection (5)(c) is the aggregate amount of the profit, loss or expense of the REIT manager in respect of each of the REIT units in E in that provision; and

(c)

H in subsection (5)(c) is the aggregate amount of the profit, loss or expense of the REIT manager in respect of each of the REIT units in F in that provision.

(7) Where a method in subsection (5) has been applied to determine the value at receipt of the transferred REIT units for the basis period of any year of assessment, the same method must be applied for that purpose for the basis period of any subsequent year of assessment unless the Comptroller agrees otherwise.

(8) In this section —“market value”, in relation to a REIT unit, means the amount that would be realised if the REIT unit had been sold on the open market or such other value as appears to the Comptroller to be reasonable in the circumstances;

“regular interval”, in relation to a basis period, means one of a number of equal periods within the basis period —(a)

where the aggregate of all of those equal periods is equal to the basis period; and

(b)

where the duration of each equal period —(i)

in a case where the REIT manager has previously been allowed a deduction under this section, is the one previously adopted by the REIT manager for the purpose of this section; or

(ii)

in any other case, is any duration adopted by the REIT manager for the purpose of this section;

“REIT” or “real estate investment trust” has the meaning given by section 43(10);

“REIT manager”, in relation to a real estate investment trust, means an entity which has been appointed to manage the property of, or operate, the real estate investment trust;

“REIT unit” means a unit in a REIT that a REIT manager has received from the trustee of that REIT as consideration for the services performed by the REIT manager in respect of that REIT;

“value at receipt”, in relation to a REIT unit, means the market value of the REIT unit when it was received by the REIT manager from the trustee of the REIT.[Act 35 of 2024 wef 27/11/2024]