Part 12Real Estate Investment Trusts

Chapter 10Joint ventures

Specific requirements and modifications

591Conditions as to balance of business

1

This section applies if—

a

a notice is given under section 586 in respect of a joint venture company, or

b

a notice is given under section 587 in respect of a joint venture group.

2

Condition A in section 531 (balance of business: profits) must be met in respect of the company or group in relation to each accounting period in relation to which the notice has effect.

3

Condition B in section 531 (balance of business: assets) must be met in respect of the company or group at the beginning of each accounting period in relation to which the notice has effect.

4

For the purposes of this section, section 531 applies—

a

in the case of a joint venture company, as if it were a company which had given a notice under section 524, and

b

in the case of a joint venture group, as if it were a group in respect of which a notice had been given under section 523.

592Joint venture groups: financial statements

1

This section applies if a notice is given under section 587 in respect of a joint venture group.

2

The principal company of the joint venture group must prepare financial statements for the group for each accounting period in relation to which the notice has effect.

3

The reference in subsection (2) to financial statements is a reference to financial statements of a kind required under section 532(2).

4

Sections 532(3) and 533 apply to the financial statements under subsection (2) as they apply to financial statements under section 532(2).

5

Financial statements prepared under subsection (2) must be submitted to an officer of Revenue and Customs.

6

Financial statements under subsection (2) are in addition to the provision required in respect of the members of the joint venture group (as a result of the application of this Part to the group) in financial statements under section 532.

593Financial statements under section 532: joint venture groups

1

This section applies if a notice is given under section 587 in respect of a joint venture group.

2

The amount to be included in the financial statements under section 532(2) in relation to a member of a joint venture group is the relevant percentage of profits, expenses, gains, losses, assets and liabilities of the member.

3

“The relevant percentage” means—

a

in a case where a notice was given under section 587(1), the percentage of the beneficial interest in the member that is held by members of the venturing group, and

b

in a case where a notice was given under section 587(2), the percentage of the beneficial interest in the member that is held by the venturing company.

4

Section 533 accordingly has effect in relation to the member as if for subsection (3) there were substituted subsections (2) and (3) of this section.

594Modifications of Chapter 3

1

Section 534(4) (profits) has effect in relation to a joint venture company or a member of a joint venture group as if for the words from “is to be treated” to the end there were substituted “is to be ignored for the purposes of this section”.

2

Section 535(7) (gains) has effect in relation to a joint venture company or a member of a joint venture group as if for the words from “is to be treated” to the end there were substituted “is to be ignored for the purposes of this section”.