Overview
1586.This Part sets out the rules applicable to UK REITs.
1587.A UK REIT is:
a group of companies (a “group UK REIT”) the principal company of which gives a notice under section 523; or
a single company (a “company UK REIT”) which gives a notice under section 524.
1588.In either case, the company must not have ceased to be a UK REIT in accordance with section 571, 572 or 578.
1589.Provided that a UK REIT meets certain conditions (see Chapter 2 of this Part and sections 538 (entry charge), and 548 (distributions)), there is no charge to corporation tax (or income tax in the case of certain non-UK companies) on profits or gains of “property rental business” (or “UK property rental business” in the case of non-UK companies). “Property rental business” is defined in section 519(1), “UK property rental business” is defined in section 520 and “non-UK company” is defined in section 521(2).
1590.Distributions made by the principal company of a group UK REIT or company UK REIT of profits and gains of property rental business are subject to deduction of tax at source under regulations made under section 973 of ITA (SI 2009/2036). In the hands of a shareholder, the distribution is treated as if it is UK property business income and is taxed accordingly with a credit for tax which has already been deducted at source.
1591.This Act enacts certain regulations which modify the primary legislation through layers of cross-references. In particular the Act enacts the regulations dealing with joint venture companies (SI 2006/2866)and breach of conditions (SI 2006/2864 and SI 2007/3540), except for regulation 11 of SI 2006/2864.
1592.The Act also enacts the regulations on joint venture groups (SI 2007/3425).
