Singapore-based OUE Real Estate Investment Trust (OUE REIT) has declared a distribution of 1.13 cents per unit for the second half of 2024, with key dates and tax implications outlined for unitholders and Convertible Perpetual Preferred Unit (CPPU) holders. The distribution is broken down into three components:

• Taxable income distribution: 0.82 cents per Unit
• Tax-exempt income distribution: 0.11 cents per Unit
• Capital distribution: 0.20 cents per Unit

Additionally, CPPU holders will receive a total payout of S\$1,106,010.93 for the relevant period. This announcement could have significant implications for investors, especially with the breakdown of taxable and non-taxable components and the payment timeline.

Key Dates for Investors

Investors should take note of the following critical dates:

• Ex-distribution Date: 9:00 a.m., Monday, 3 February 2025
• Books Closure Date: 5:00 p.m., Tuesday, 4 February 2025
• Deadline for Tax Declaration Forms: 5:00 p.m., Monday, 17 February 2025
• Distribution Payment Date: Wednesday, 5 March 2025

Unitholders whose securities accounts are credited with Units by the Books Closure Date will qualify for the distribution.

Tax Implications and Required Declarations

The distribution includes components that are exempt from tax and taxable under specific circumstances:

• Tax-Exempt Income Distribution: Exempt for all unitholders, with no tax deducted at source.
• Capital Distribution: Considered a return of capital and not subject to tax, but may reduce the cost base of the Units or CPPUs for holders liable to tax on sale profits.
• Taxable Income Distribution: Subject to tax unless exemptions apply. Categories of unitholders exempt from tax deduction include individuals, Singapore-incorporated companies, and certain international organizations.

To receive gross distribution, eligible unitholders in categories (b) to (f) must complete the “Declaration for Singapore Tax Purposes Form A,” which will be sent out by the Unit Registrar on or around 6 February 2025. Foreign non-individuals and foreign funds may also qualify for a reduced 10% tax rate and must complete the form to claim this benefit.

Potential Price Sensitivity

This declaration of tax-exempt and taxable distributions, combined with the clear guidance on tax treatment, could impact investor sentiment and potentially influence the trading price of OUE REIT units. The inclusion of a significant tax-exempt component and capital distribution might make the REIT more attractive to certain categories of investors.

Moreover, the details regarding the CPPU payout, amounting to over S\$1 million, underscore the ongoing returns to holders of these instruments, which could also affect market perception positively.

Important Reminder

Unitholders and CPPU holders are reminded to submit the required tax declaration forms by Monday, 17 February 2025, to ensure they receive their distributions either gross or net of the applicable tax. Late submissions will result in the deduction of tax as per applicable laws.

Those holding Units or CPPUs under the Central Provident Fund Investment Scheme (CPFIS) or Supplementary Retirement Scheme (SRS) will automatically receive gross distributions and do not need to submit forms.

Disclaimer

The information provided in this article is for informational purposes only and does not constitute investment advice. Investments in REITs are subject to risks, including potential loss of principal. Past performance is not indicative of future results. Investors are advised to consult their financial advisors before making any investment decisions.