Schroder European Real Estate Investment Trust will continue to contest the French tax authorities’ audit on its tax structure in that country.
Schroder, which invests in European growth cities and regions, said previously that the French tax authority was proceeding with an audit.
The group disclosed in its 2024 annual report that the range of potential outcomes indicates a possible exposure of up to €12.6m, excluding potential penalties.
As part of the tax audit, a formal ‘proposal for adjustment’ had been received from the French tax authority, which included a proposed penalty on any tax found ultimately due, Schroder said on Wednesday.
Including the application of interest and penalties, the group’s exposure could to be up to €14.2m.
“Based on external tax and legal advice received at the time of implementation, and which has continued to be reviewed on an ongoing basis, the board continues to believe that an outflow is not probable and therefore no provision is recognised,” it said.
The group disagreed with the “proposal for adjustment”, and would continue to contest its position and will provide further updates as required, said the company.
Earlier this month, Schroder said it had shown “significant resilience” in a fluctuating economic environment, and it expected 2025 to be a more supportive backdrop for Reits.
The group reported a 3% rise in earnings from operational activities to €8.2m for the year ended September, due primarily to rental growth offsetting the effects of higher interest costs.
Earnings were also driven by high occupancy, a diversified tenant base, “excellent” rent collection and the indexation features of its portfolio delivering income growth, it said.
Net asset value of €164.1m, or 122.7c per share was primarily driven by outward yield movement in the first half. IFRS profit of €0.6m contributed to a positive NAV total return of 0.4%, the group said at the time of the earnings release.
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