Part 12 Real Estate Investment Trusts

Chapter 9 Leaving the UK REIT regime

Notice to leave regime

577 Notice under section 572: multiple breaches of conditions in Chapter 2
(1) An officer of Revenue and Customs may give a notice under section 572(1) if conditions A, B and C are met.
(2) Condition A is that at least two of the conditions in sections 528 to 531 have been breached during the relevant 10-year period.
(3) Condition B is that the breached conditions are not both (or all) contained in the same section; and for this purpose the condition in section 530 (distribution of profits) is to be treated as contained in section 529.
(4) Condition C is that the UK REIT has relied on some or all of the provisions mentioned in subsection (5)(a) more than 4 times (in total) during the relevant 10-year period.
(5) For the purposes of this section—
(a) the provisions referred to in subsection (4) are—
section 562A(6) ,
section 563(2), and
section 568(1) and (2), and
Words in s. 577(5)(a) substituted (with effect in accordance with Sch. 4 para. 13(2) of the amending Act) by Finance Act 2012 (c. 14), Sch. 4 para. 12(2)
(b) “the relevant 10-year period” is the period of 10 years beginning with the day on which the first of the conditions to be breached was first breached.
(6) If the first of the conditions to be breached is condition A in section 531 (balance of business: profits), that condition is to be treated for the purposes of subsection (5)(b) as breached from the last day of the accounting period in which profits are assessed for the purposes of the condition.
(7) For the purposes of this section the following breaches are to be ignored—
(a) a breach of condition C or D in section 528 (conditions for company) occurring as a result of—
(i) a member of a group UK REIT becoming a member of another group UK REIT, or
(ii) a company UK REIT becoming a member of a group UK REIT,
(b) a breach of condition C ... in section 528 in respect of which section 525(2) to (4) ... applies,
Words in s. 577(7)(b) omitted (with effect in accordance with Sch. 4 para. 13(2) of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 4 para. 12(3)(a)
(c) a breach of any of conditions C, E and F in section 528 in respect of which section 558(3) or 559(6) applies,
Words in s. 577(7)(c) substituted (with effect in accordance with Sch. 4 para. 13(2) of the amending Act) by Finance Act 2012 (c. 14), Sch. 4 para. 12(3)(b)
(d) a breach of condition A in section 531 in accounting period 1, and
(e) a breach of condition B in section 531 at the beginning of that period.
(8) In accordance with section 527(6) and (7), a breach of condition D in section 528 during the first 3-year period (as defined in section 527(8)) is also to be ignored for the purposes of this section.
S. 577(8) inserted (with effect in accordance with Sch. 4 para. 13(2) of the amending Act) by Finance Act 2012 (c. 14), Sch. 4 para. 12(4)