Manulife US Reit urges unitholders to submit tax forms on time to reduce tax burden

UNITHOLDERS of Manulife US Real Estate Investment Trust (MUST) should submit US withholding tax documents on time to safeguard their interest, said the manager on Wednesday (Jul 24).

It asked both existing unitholders with invalid or expired tax forms and new unitholders, who have not provided their forms, to either submit to the trust’s boardroom by Aug 19, or to their respective depository agents by the stipulated deadlines.

The manager noted that MUST would have to “bear the burden” of withholding tax based on the proportion of unitholdings who fail to submit on time, which would adversely impact the trust’s income retained. “If all unitholders were to submit their valid US tax documentation, there would not be any US withholding tax borne by the Reit (real estate investment trust),” it said.

Therefore, MUST and its unitholders would benefit if the latter continue to submit valid forms even as distributions are halted.

In July 2023, the trust breached existing financial covenants after portfolio valuations fell 14.6 per cent, affecting its ability to pay out distributions.

To remedy its financial covenant breach, the trust’s manager unveiled recapitalisation plans, which sought to “revitalise” the Reit and provide more time for the manager to sell assets and realise value.

Under the plan, lenders have agreed to waive past and existing breaches, and have provided a temporary relaxation of financial covenants until December 2025.

While distributions would be halted until December 2025, it could resume if the Reit meets “early reinstatement conditions”, which are similar to Singapore’s regulatory leverage limits.

And when distributions resume, unitholders with a valid tax form would continue to be exempted from US withholding taxes, said the manager.

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“We strongly encourage all unitholders to submit their forms W-8 or W-9 to minimise potential withholding taxes,” it added.

Non-US citizens who want to trade in MUST’s securities are required to complete a form W-8, while US citizens must submit a form W-9.

Units of MUST ended 2.5 per cent or US$0.002 lower at US$0.077 on Wednesday.