REITs as property income vs. mortgage interest

Whether the changes to mortgage interest deduction should change how REITs are reported

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Just after some opinions if possible please...

Given that income paid out of tax-exempt profits from REITs is treated as property income in the hands of investors, HMRC guidance has always advised that this should be reported as 'other income' and the relevant tax reported alongside.  However, this does not actually show it as property income in any computations.  Although previously this has not had any particular implications I am aware of, is this now incorrect due to the changes to the way mortgage interest is deducted?

Naturally in the larger portion of cases, the amount eligible for basic rate tax relief will be the non-deducted interest portion but in instances where this is restricted to the property income for the year, surely it would now be beneficial for REIT income to be shown as property income rather than just non-savings income?

My thoughts are perhaps they don't want to treat it as 'proper' property income for this purpose or maybe it just hasn't been considered?

Any opinions would be appreciated.

Thanks

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