SCHEDULES
SCHEDULE 17Group Real Estate Investment Trusts: modifications
Entering Real Estate Investment Trust Regime
8
1
A notice under section 109 must be given by the principal company.
2
For the purposes of the requirement under section 109(2)(c) a reference to the company shall be treated as a reference to the principal company.
9
1
In section 111(1) a reference to C (pre-entry) shall be treated as a reference to a UK resident member of G (pre-entry).
2
Section 111(2) shall have effect in relation to each UK resident company which is a member of the group; and for that purpose—
a
a reference to C (pre-entry) (in subsection (2) or (4)) shall be treated as a reference to the company as a member of G (pre-entry), and
b
a reference to C (tax-exempt) (in subsection (2) or (4)) shall be treated as a reference to the company as a member of G (property rental business).
3
In section 111(5) the reference to the company shall be treated as a reference to each UK resident member.
4
Where a percentage of the assets of a member of G (property rental business) is excluded from a financial statement in accordance with paragraph 31(5), the excluded percentage shall be disregarded for the purposes of section 111.
10
1
If a UK resident company becomes a member of a group to which Part 4 applies, section 111 shall apply to the company as if—
a
references to entry were references to becoming a member of the group,
b
references to C (pre-entry) were references to the company before becoming a member of the group, and
c
references to C (tax-exempt) were references to the company as a member of G (property rental business).
2
Where a percentage of the assets of the company would be excluded from a financial statement in accordance with paragraph 31(5), the percentage which would be excluded shall be disregarded in applying section 111 to the company.
11
1
In the application of section 112—
a
a reference to a company to which Part 4 applies shall be treated as a reference to each member of a group to which Part 4 applies,
b
a reference to C (residual) shall be treated as a reference to the company as a member of G (residual),
c
in subsection (3) the reference to assets treated as sold and re-acquired under section 111(2) shall be construed in accordance with paragraph 9(4) or 10(2), and
d
the section shall apply to non-UK resident members—
i
as if section 111 applied to UK property rental business (within the meaning given by paragraph 32(1)) carried on by them,
ii
as if a reference to a charge to corporation tax under Case VI of Schedule D were a reference to a charge to income tax, and
iii
as if a reference to the rate at which the company pays tax on income were, where relevant, a reference to the rate at which the company would pay tax on the notional income if it were the highest part of the company's income.
2
Where a company joins a group to which Part 4 applies, section 112 shall apply to the company as if joining the group amounted to becoming a company to which Part 4 applies (but with a reference to C (residual) being treated as a reference to the company as a member of G (residual)).
12
1
Section 113(1) to (4) shall apply in relation to G (property rental business), G (pre-entry), G (residual) and G (post-cessation) as they apply in relation to C (tax-exempt), C (pre-entry), C (residual) and C (post-cessation).
2
Section 113(1) to (6) shall also apply in relation to each UK resident company which is a member of the group; for which purpose—
a
a reference to C (tax-exempt) is a reference to the company if or in so far as it is a member of G (property rental business),
b
a reference to C (pre-entry) is a reference to the company as a member of G (pre-entry) (or, in the case of a company which joins a group to which Part 4 applies, a reference to the company before joining),
c
a reference to C (residual) is a reference to the company if or in so far as it is a member of G (residual), and
d
a reference to C (post-cessation) is a reference to the company as a member of G (post-cessation) (or, in the case of a company which leaves a group to which Part 4 applies, a reference to the company after leaving).
3
Where a percentage of the profits of a member of G (property rental business) is excluded from a financial statement in accordance with paragraph 31(5), the excluded percentage shall be treated for the purposes of section 113 as profits of G (residual).
13
Regulations under section 114 may make provision in relation to a group to which Part 4 applies as if references to the company were references to the principal company.
14
Section 115 shall apply as if for subsection (2) there were substituted—
2
That sum is—
where—
- a
Profits means the aggregate of the UK profits of G (property rental business) arising in the accounting period as set out in the financial statement under paragraph 31(2)(b) (before the offset of capital allowances),
- b
Financing Costs (all) means the amount of the financing costs incurred in respect of the property rental business of G (property rental business) as set out in the financial statement under paragraph 31(2)(b), and
- c
Financing Costs (external) means the amount of the financing costs incurred in respect of the UK business of G (property rental business), excluding financing costs owed by one member of G (property rental business) to another, as set out in the financial statement under paragraph 31(2)(a).