Part 12

Real Estate Investment Trusts
Chapter 6

Distributions

Distributions to certain shareholders

“The section 552 amount”
552
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—
D O × S O × (B R T)/(M C T)
where—
DO is—
1. 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. 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. the percentage of rights in respect of those shares held by the holder of excessive rights, or
2. 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 main rate of corporation tax .
3
Step 2: find the amount given by—
D P × S P × (B R T)/(M C T)
where—
DP is—
1. 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. 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. the percentage of rights in respect of those shares held by the holder of excessive rights, or
2. 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.
Words in s. 552(2) substituted (with effect in accordance with Sch. 1 para. 22 of the amending Act) by Finance Act 2014 (c. 26), Sch. 1 para. 14(6)