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Corporation Tax Act 2010

Section 564: Breach of condition as to distribution of profits

1776.This section sets out how the distribution condition in section 530 can be breached without causing the UK REIT regime to terminate. It is based on section 116(1) and (3) of FA 2006.

1777.This section enacts regulation 6(1) to (3) and (5) to (8) of SI 2006/2864. See Change 43in Annex 1.

1778.Subsection (2) provides that the breach is ignored if the company does not meet the distribution condition in section 530, but an amount calculated under section 565 is charged to corporation tax. The amount is charged to corporation tax as if it were profits of residual business of the distributing company. Accordingly the rate of tax is the main rate of corporation tax.

1779.As indicated in section 569, this section is subject to section 572 which allows an officer of Revenue and Customs to issue a notice of termination of the UK REIT regime in some circumstances.

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