536Effects of entry: corporation taxU.K.
(1)Property rental business carried on before entry by a company which becomes, or becomes a member of, a UK REIT (an “incoming company”) is to be treated for corporation tax purposes as ceasing at entry.
(2)Assets which immediately before entry are involved in property rental business of an incoming company are to be treated for corporation tax purposes as being—
(a)sold by the pre-entry company immediately before entry, and
(b)reacquired immediately after entry by the company so far as it carries on property rental business.
(3)The sale and reacquisition deemed under subsection (2) is to be treated as being for a consideration equal to the market value of the assets.
(4)A gain accruing as a result of subsection (2) is not a chargeable gain.
(5)For corporation tax purposes, one accounting period of an incoming company ends on entry and a new one begins.
(6)In the case of a group UK REIT—
(a)if a percentage of the assets of a member of the group is excluded from a financial statement in accordance with section 533(3), that percentage of those assets is to be ignored in the application of subsection (2) to the member, and
(b)this section has effect in relation to a non-UK member of the group as if references to property rental business were references to UK property rental business of the member.
(7)This section does not apply if—
(a)a company which was a member of one group UK REIT becomes a member of a different group UK REIT, or
(b)a company which was a company UK REIT becomes a member of a group UK REIT.
(8)This section and section 537 are subject to section 559 (demergers: company leaving group UK REIT).
(9)For the meaning of “entry”, see section 607(1).