Dividends are the amounts paid, on a monthly basis, to all investors in a property. Dividends are calculated as Gross Rent, less deductions for:
- Property related costs (including property management, maintenance and insurance)
- Estimated likely void periods (i.e. when there are no tenants paying rent)
- AUM fee
- Corporation tax
For a leveraged property investment, there will also be a deduction for interest charges, which are tax deductible. For example, for every £1 of interest, £0.20 is offset against corporation tax (note corporation tax rates are subject to change).