Part 12Real Estate Investment Trusts

Chapter 6Distributions

Distributions to certain shareholders

552“The section 552 amount”

(1)

For the purposes of section 551, the section 552 amount is calculated by taking 3 steps.

(2)

Step 1: find the amount given by—

DO×SO×BRTMCTmath

where—

DO is—

  1. (a)

    in the case of a group UK REIT, the amount of the group's UK profits (as defined by section 530(2)) distributed in respect of ordinary shares in the principal company, and

  2. (b)

    in the case of a company UK REIT, the amount of profits of property rental business of the company distributed in respect of ordinary shares in the company,

SO is—

  1. (a)

    the percentage of rights in respect of those shares held by the holder of excessive rights, or

  2. (b)

    if less, the percentage of rights held by the recipient of the distribution,

in respect of which the distribution is made,

BRT is the basic rate of income tax in force at the time the distribution is made, and

MCT is the F1main rate of corporation tax .

(3)

Step 2: find the amount given by—

DP×SP×BRTMCTmath

where—

DP is—

  1. (a)

    in the case of a group UK REIT, the amount of the group's UK profits (as defined by section 530(2)) distributed in respect of preference shares in the principal company, and

  2. (b)

    in the case of a company UK REIT, the amount of profits of property rental business of the company distributed in respect of preference shares in the company,

SP is—

  1. (a)

    the percentage of rights in respect of those shares held by the holder of excessive rights, or

  2. (b)

    if less, the percentage of rights held by the recipient of the distribution,

in respect of which the distribution is made, and

BRT and MCT have the same meaning as they have in subsection (2).

(4)

Step 3: add together the amounts given by steps 1 and 2.

That amount is the section 552 amount.