Tax
Tax Overview
For listed securities which derive income in the U.S., the U.S. Internal Revenue Service ("IRS") requires certain documentation from the ultimate beneficial owner to ensure the appropriate level of withholding tax is deducted.
Unitholders of Manulife US REIT ("Unitholders") are subject to a maximum withholding tax rate of 30% on income they derive from U.S. investments. Hence, Unitholders must comply with certain documentation requirements in order to be exempted from certain withholding tax under the United States Internal Revenue Code of 1986, as amended (the "IRC"), including under the United States Foreign Account Tax Compliance Act ("FATCA").
Specifically, Unitholders must establish their status for FATCA purposes and their eligibility for exemption from U.S. withholding tax on certain interest income earned by Manulife US REIT by providing an applicable U.S. IRS Form W-8 or such other certification or other information related to FATCA that is requested from time to time.
Unitholders must also provide updates of any changes to their status for FATCA purposes including information relating to their name, address, citizenship, personal identification number or tax identification number, tax residencies, and tax status. If a Unitholder fails to provide or to update relevant information necessary for compliance with U.S. tax withholding requirements, including FATCA, or provide inaccurate, incomplete or false information, amounts payable by Manulife US REIT to Unitholder may be subject to deduction or withholding in accordance with U.S. tax law and any intergovernmental agreements.
Tax Forms
It is important for Unitholders to comply with the following documentation requirements or they will be subject to U.S. withholding tax under the IRC, including under FATCA. For further details on the documentation required for U.S. tax exemption, Unitholders can also refer to " APPENDIX I – PROCEDURES FOR THE SUBMISSION OF U.S. TAX FORMS" of the Prospectus of Manulife US REIT dated 12 May 2016 and registered by the Monetary Authority of Singapore on 12 May 2016.
While distributions to Unitholders are slated to be halted till 31 December 2025 pursuant to the Recapitalisation Plan set out in the Circular dated 29 November 2023, distributions may resume earlier if the early reinstatement conditions as defined in the Circular are achieved. However, during this period, interest income from the United States subsidiaries will still be paid to Manulife US REIT. As such, Manulife US REIT would have to bear the burden of withholding tax based on the proportion of unitholdings of Unitholders who fail to submit the United States (“U.S.”) withholding forms and certificates. This would adversely impact the income retained. Accordingly, we strongly encourage all Unitholders to submit the relevant tax forms to reduce the withholding tax burden on Manulife US REIT. Lastly, when the distributions resume, distributions to Unitholders with valid U.S. tax forms will continue to be exempted from U.S. withholding tax deduction.
If you have questions, please read our Frequently Asked Questions or email us at usreitinquiry@manulifeusreit.sg.
Individual Unitholders
A Unitholder who is an individual must submit a completed Form W-8BEN or W-9, in order to be considered for certain exemption of applicable withholding tax applied to distributions made by Manulife US REIT to Unitholders.
Form W-8BEN and W-9 at a Glance
Step 1
Fill out Forms
Non-U.S. Person:
Form W-8BEN
Currency Election Form
U.S. Person:
Form W-9
Currency Election Form
Step 2
Seek Assistance
For assistance, refer to sample form or call +65 6230 9685 during office hours from Monday to Friday, excluding public holidays
Step 3
Return Forms
Mail back forms before stipulated date on letter using local postage-paid envelope provided, or email a scanned copy to MUSTSRS@boardroomlimited.com
Non-U.S. Person:
Form W-8BEN
Currency Election Form
U.S. Person:
Form W-9
Currency Election Form
Form W-8BEN and W-9 at a Glance
Form W-8BEN
Certifies the individual is the beneficial owner of the account
This would include the majority of individual Unitholders in Singapore, who are not conducting any trade or business in the U.S., and classified as non-U.S. persons
Remains in effect for a period starting on the date the Form W-8BEN is signed and ending on the last day of the third succeeding calendar year. For example, a Form W-8BEN signed on 31 March 2021 remains valid through 31 December 2024
Unitholders must provide updates of any change to their status for FATCA purposes including information relating to their name, address, citizenship, personal identification number or tax identification number, tax residencies, and tax status
Form W-9
Filed by U.S. persons
U.S. persons to provide Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) for reporting purposes
Does not expire unless individual has a change in circumstances
Unitholders that are U.S. persons or that are entities disregarded as separate from a U.S. person for U.S. federal income tax purposes must provide a Form W-9. Further details on how to complete a Form W-9 are available on the U.S. Internal Revenue Service website at http://www.irs.gov
For more information, please refer to Appendix I in the prospectus of Manulife US REIT dated 12 May 2016 and registered by the Monetary Authority of Singapore on 12 May 2016
Entities Unitholders (Corporate)
An entity that is disregarded as separate from an entity that is not a foreign intermediary for U.S. federal income tax purposes and for which its investment in the Units is not effectively connected with its conduct of a trade or business in the U.S.
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Depository Agents and Nominees
Acting as a foreign intermediary (that is, acting not for its own account, but for the account of others as an agent, nominee, or custodian).
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| Unitholders who are U.S. Persons |
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Form W-8BEN and W-9 at a Glance
Step 1
Fill out Forms
Non-U.S. Person:
Form W-8BEN
Currency Election Form
U.S. Person:
Form W-9
Currency Election Form
Step 2
Seek Assistance
For assistance, refer to sample form or call +65 6230 9685 during office hours from Monday to Friday, excluding public holidays
Step 3
Return Forms
Mail back forms before stipulated date on letter using local postage-paid envelope provided, or email a scanned copy to MUSTSRS@boardroomlimited.com
Non-U.S. Person:
Form W-8BEN
Currency Election Form
U.S. Person:
Form W-9
Currency Election Form
Form W-8BEN and W-9 at a Glance
Form W-8BEN
Certifies the individual is the beneficial owner of the account
This would include the majority of individual Unitholders in Singapore, who are not conducting any trade or business in the U.S., and classified as non-U.S. persons
Remains in effect for a period starting on the date the Form W-8BEN is signed and ending on the last day of the third succeeding calendar year. For example, a Form W-8BEN signed on 31 March 2021 remains valid through 31 December 2024
Unitholders must provide updates of any change to their status for FATCA purposes including information relating to their name, address, citizenship, personal identification number or tax identification number, tax residencies, and tax status
Form W-9
Filed by U.S. persons
U.S. persons to provide Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) for reporting purposes
Does not expire unless individual has a change in circumstances
Unitholders that are U.S. persons or that are entities disregarded as separate from a U.S. person for U.S. federal income tax purposes must provide a Form W-9. Further details on how to complete a Form W-9 are available on the U.S. Internal Revenue Service website at http://www.irs.gov
For more information, please refer to Appendix I in the prospectus of Manulife US REIT dated 12 May 2016 and registered by the Monetary Authority of Singapore on 12 May 2016
| Entities Unitholders (Corporate) |
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Qualified Notices
In relation to the final regulations released by the U.S. Internal Revenue Service ("IRS") under Internal Revenue Code (the "Code") Section 1446(f) in 2020, no tax is required to be withheld from unitholders of Manulife US REIT.
Briefly, Section 1446(f) of the Code provides that if a non-U.S. person transfers an interest in a partnership, the purchaser must withhold 10% from the purchase price if any portion of the gain on the sale would be treated as effectively connected with the conduct of a US trade or business. If the purchaser fails to withhold, the partnership has an obligation to withhold from distributions to the purchaser.
Under the final regulations implementing Section 1446(f) of the Code relating to the withholding on transfers of publicly traded partnership (“PTP”) interests, brokers that effect a transfer on behalf of a foreign partner (i.e., a non-US person) and pay the amount realised to a foreign transferor that is their customer must generally withhold a tax equal to 10% of the amount realised, subject to certain exceptions. These rules were effective from 1 January 2023.
Manulife US REIT is a PTP and it has been carefully structured to ensure that it is not engaged in a US trade or business. One of the exceptions to withholding tax is if the PTP provides in a qualified notice that it is not engaged in a US trade or business. In this regard, Manulife US REIT intends to provide a qualified notice on a quarterly basis on its website in the manner required by the regulations, indicating that it is not engaged in a US trade or business. Accordingly, withholding tax is not applicable to transfers by Unitholders and brokers who effect transfers of units in Manulife US REIT are not required to withhold Section 1446(f) tax.
The Section 1446(a) Qualified Notice sets out the components of Manulife US REIT’s distribution, if any. As Manulife US REIT does not have any income that is effectively connected with a US trade or business, nominees should not be required to withhold under Section 1446(a) on distributions received from Manulife US REIT.
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Notice - 31 December 2022
Notice - 18 October 2022
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Restriction On Ownership Of Units
Unitholders are prohibited from directly or indirectly owning in excess of 9.8% of the outstanding Units (“Unit Ownership Limit”), subject to any increase or waiver pursuant to the terms of Manulife US REIT’s Trust Deed and on the recommendation of the Manager.
The Trust Deed provides that Units held directly or indirectly by any person in excess of the Unit Ownership Limit will be automatically forfeited and held by the Trustee (“Automatic Forfeiture”). While forfeited Units are held by the Trustee, all rights attributable to those Units, such as the right to vote and the right to receive distributions, will be held by the Trustee; the Unitholder from whom the Units are forfeited shall have no right to vote or receive distributions arising from such Units.
The Trustee will have the right and power to dispose of Units subject to Automatic Forfeiture, and upon such disposal the Unitholder from whom the Units are forfeited will receive the proceeds (net of any commissions and expenses) from the disposition. If there is an excess in the disposal price of the forfeited Units above the price paid by such Unitholder for the same forfeited Units, the excess shall be donated by the Trustee to a charitable, philanthropic or benevolent organisation or purpose.
For the avoidance of doubt, the Automatic Forfeiture is effective automatically, whether or not the Trustee or the Manager is aware of the change in ownership or aware of the fact that the Unit Ownership Limit has been breached. Unitholders are advised to manage their interests in the Units so as not to breach the Unit Ownership Limit and trigger the Automatic Forfeiture.
Currency Election
Distributions will be declared in U.S. dollars. Each Unitholder will receive his distribution in Singapore dollars equivalent of the U.S. dollar distribution declared, unless he elects to receive the relevant distribution in U.S. dollars by submitting a Currency Election Form by the relevant cut-off date.
Save for approved depository agents (acting as nominees of their customers), each Unitholder may elect to receive his entire distribution in Singapore dollars or U.S. dollars and shall not be able to elect to receive distributions in a combination of Singapore dollars and U.S. dollars.
CDP launched the Currency Conversion Service on 15 June 2020. This new service will enable CDP direct account holders with Direct Crediting Service (DCS) to have their foreign currency cash distribution converted into Singapore Dollar and directly credited into their DCS bank accounts. If you are a CDP Securities Account holder with DCS, and wish to receive your distributions in USD, please be reminded to opt-out of Currency Conversion Service. For more information, please visit https://www.sgx.com/cdp-goes-digital and contact Central Depository at (65) 6535 7511 or asksgx@sgx.com.
Investor Relations Enquiries
Unitholders who have any questions or require assistance in completing the required forms can call +65 6230 9685 during office hours from Monday to Friday, excluding public holidays. Alternatively, email your questions to MUSTSRS@boardroomlimited.com.
Notes
Capitalised terms used in this section, shall, unless otherwise defined, bear the same meanings assigned to them in the Prospectus of Manulife US REIT dated 12 May 2016 and registered by the Monetary Authority of Singapore on 12 May 2016.