578 Automatic termination for breach of certain conditions in section 528
(1) Subsection (2) applies if condition A, B, E or F in section 528 (conditions for company) is not met in relation to an accounting period.
(2) The group or (as the case may be) the company is to be taken to have ceased to be a UK REIT at the end of the previous accounting period.
(3) The company which gave a notice under section 523 or 524 must notify an officer of Revenue and Customs as soon as is reasonably practicable if condition A, B, E or F in section 528 ceases to be met in relation to the company.
(1) Subsections (3) to (7) apply if—
(a) a group or company ceases to be a UK REIT, or
(b) a company ceases to be a member of a group UK REIT.
(2) For the purposes of those subsections references to an “exiting company” are to each member of the group UK REIT or (as the case may be) to the company UK REIT.
(3) Property rental business of an exiting company is to be treated for corporation tax purposes as ceasing immediately before cessation.
(4) Assets which immediately before cessation are involved in property rental business of an exiting company are to be treated for corporation tax purposes as being—
(a) sold immediately before cessation by the company so far as it carries on property rental business, and
(b) reacquired immediately after cessation by the post-cessation company.
(5) The sale and reacquisition deemed under subsection (4) is to be treated as being for a consideration equal to the market value of the assets.
(6) If a percentage of the assets of an exiting company is excluded from a financial statement in accordance with section 533(3), that percentage of those assets is to be ignored for the purposes of subsection (4).
(7) For corporation tax purposes—
(a) an accounting period of the company so far as it carries on residual business ends on cessation, and
(b) a new accounting period of the company begins.
(8) In relation to a non-UK member of a group UK REIT, subsections (3) to (7) have effect as if references to property rental business were references to UK property rental business.
(9) Subsections (3) to (7) do not apply if—
(a) a member of a group UK REIT becomes a member of another group UK REIT, or
(b) a company UK REIT becomes a member of a group UK REIT.
(10) This section is subject to section 559 (demergers: company leaving group UK REIT).
(1) Subsections (3) to (5) apply for the purposes of CAA 2001 if a group or a company ceases to be a UK REIT.
(2) Subsections (3) to (5) also apply for those purposes if a company ceases to be a member of a group UK REIT.
(3) The sale and reacquisition deemed under section 579(4)—
(a) does not give rise to allowances or charges, and
(b) does not enable an election to be made under section 198 or 199 of CAA 2001 (apportionment).
(4) Section 579(5) (deemed consideration for sale and reacquisition) does not apply.
(5) Anything done before cessation by or to a company so far as it carries on property rental business in relation to an asset which is deemed under section 579(4) to be sold and reacquired is to be treated after cessation as having been done by or to the post-cessation company.
(6) This section is subject to section 559 (demergers: company leaving group UK REIT).
(1) Subsection (6) applies if conditions A, B and C are met.
(2) Condition A is that a group or company ceases to be a UK REIT as a result of a notice under section 571.
(3) Condition B is that the group or company had been a UK REIT for a continuous period immediately before cessation of less than 10 years.
(4) Condition C is that, during the post-cessation period, a relevant company, that is to say—
(a) in the case of a group, a member of the group, or
(b) otherwise, the company,
disposes of an asset that was involved in property rental business of the relevant company.
(5) “The post-cessation period” means the period of two years beginning with the date of cessation.
(6) The relevant company's liability to corporation tax is to be determined without regard to—
(a) any deemed disposal under section 536(2) that resulted in a gain,
(b) any deemed disposal under section 555(2), or
(c) any deemed disposal under section 579(4).
(7) Subsection (6) also applies if—
(a) a company ceases to be a member of a group UK REIT,
(b) either—
(i) the group has been a group UK REIT for a continuous period of less than 10 years, or
(ii) the company has been a member of the group for a continuous period of less than 10 years, and
(c) during the post-cessation period the company disposes of an asset that was involved in its property rental business.
(8) This section has effect in relation to a non-UK member of a group as if references to property rental business were references to UK property rental business.
(1) This section applies if—
(a) a group or a company ceases to be a UK REIT as a result of section 572 or 578, and
(b) the group or company has been a UK REIT for a continuous period immediately before cessation of less than 10 years.
(2) An officer of Revenue and Customs may direct—
(a) that a provision of this Part applies in relation to the group or company with a specified modification, or
(b) that a provision of an enactment relating to corporation tax applies, does not apply or applies with modifications in relation to the group or company.
(3) A direction under subsection (2)(a) may in particular—
(a) alter the time at which the group or company is to be taken to cease to be a UK REIT in accordance with section 572 or 578;
(b) disapply or alter the effect of section 534(1) or (2), 535(1) or 535A.
(4) A direction under subsection (2)(b) may in particular prevent all or a specified part of a loss, deficit or expense from being set off or otherwise used at all or in a specified manner.
(5) In the case of a group, a direction under subsection (2) may relate to the group as a whole or to one or more members.
(6) An appeal may be made—
(a) in the case of a group in relation to which a direction is given, by the principal company of the group,
(b) in the case of a company in relation to which a direction is given, by the company.
(7) On an appeal under subsection (6) that is notified to the tribunal, the tribunal may—
(a) quash the direction,
(b) affirm the direction, or
(c) vary the direction.
(1) This Chapter makes provision about how this Part applies in relation to property rental business carried on—
(a) by a joint venture company (as defined by section 584), or
(b) by one or more members of a joint venture group (as defined by that section).
(2) Sections 586 and 587 are about the notice required for this Part to apply in relation to the property rental business; it is the giving of the notice that makes a group UK REIT or company UK REIT a venturing group or venturing company (see section 585).
(3) Sections 588 to 590 contain provision about the effect of the notice and its duration.
(4) The remainder of the Chapter contains—
(a) specific modifications and other provision relevant to the application of this Part (see sections 591 to 594),
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) provision about the interpretation of this Chapter (see section 598).
584 Meaning of “joint venture company” and “joint venture group”
(1) In this Chapter “joint venture company” means a company carrying on property rental business (“the joint venture”) in circumstances where the condition in subsection (3) is met.
(2) In this Chapter “joint venture group” means a group of companies one or more of which is or are carrying on property rental business (“the joint venture”) in circumstances where the condition in subsection (3) is met.
(3) The condition is that an interest in the joint venture is held—
(a) by one or more members of a group UK REIT, or
(b) by a company UK REIT.
585 Meaning of “venturing group” and “venturing company”
(1) In this Chapter “venturing group” means a group UK REIT the principal company of which has given a notice under section 586(1) or 587(1).
(2) In this Chapter “venturing company” means a company UK REIT which has given a notice under section 586(2) or 587(2).
586 Notice for Part to apply: joint venture company
(1) The principal company of a group UK REIT may give notice that this Part is to apply (in accordance with this Chapter) in relation to property rental business carried on by a joint venture company.
(2) A company UK REIT may give notice that this Part is to apply (in accordance with this Chapter) in relation to property rental business carried on by a joint venture company.
(3) A company may give a notice under subsection (1) or (2) only if the 40% tests are met in relation to the joint venture company.
(4) The 40% tests are met in a case within subsection (1) if members of the group UK REIT are together beneficially entitled to—
(a) at least 40% of the profits available for distribution to equity holders in the joint venture company, and
(b) at least 40% of the assets of the joint venture company available to equity holders in the event of a winding up.
(5) The 40% tests are met in a case within subsection (2) if the company UK REIT is beneficially entitled to—
(a) at least 40% of the profits available for distribution to equity holders in the joint venture company, and
(b) at least 40% of the assets of the joint venture company available to equity holders in the event of a winding up.
(6) A notice under subsection (1) or (2)—
(a) must specify the joint venture company concerned,
(b) may be given only with the consent of that joint venture company,
(c) must specify a date from which this Part is to apply in relation to the property rental business, and
(d) must be given in writing to an officer of Revenue and Customs before the date specified under paragraph (c).
(7) A company giving a notice under subsection (1) or (2) may do so—
(a) at the same time as giving a notice under section 523 or 524 (as the case may be), or
(b) at any later time when the group or company (as the case may be) is a UK REIT.
(8) See section 588 for provision about the effect of a notice under this section.
(1) The principal company of a group UK REIT may give notice that this Part is to apply (in accordance with this Chapter) in relation to property rental business carried on by one or more members of a joint venture group.
(2) A company UK REIT may give notice that this Part is to apply (in accordance with this Chapter) in relation to property rental business carried on by one or more members of a joint venture group.
(3) A company may give a notice under subsection (1) or (2) only if the 40% tests are met in relation to the joint venture group.
(4) The 40% tests are met in a case within subsection (1) if members of the group UK REIT are together beneficially entitled to—
(a) at least 40% of the profits available for distribution to equity holders in the principal company of the joint venture group, and
(b) at least 40% of the assets of the principal company of the joint venture group available to equity holders in the event of a winding up.
(5) The 40% tests are met in a case within subsection (2) if the company UK REIT is beneficially entitled to—
(a) at least 40% of the profits available for distribution to equity holders in the principal company of the joint venture group, and
(b) at least 40% of the assets of the principal company of the joint venture group available to equity holders in the event of a winding up.
(6) A notice under subsection (1) or (2)—
(a) must specify the principal company of the joint venture group concerned,
(b) may be given only with the consent of that principal company,
(c) must specify a date from which this Part is to apply in relation to the property rental business, and
(d) must be given in writing to an officer of Revenue and Customs before the date specified under paragraph (c).
(7) A company giving a notice under subsection (1) or (2) may do so—
(a) at the same time as giving notice under section 523 or 524 (as the case may be), or
(b) at any later time when the group or company (as the case may be) is a UK REIT.
(8) See section 589 for provision about the effect of a notice under this section.
(1) If a notice is given under section 586(1), this Part applies in relation to the property rental business carried on by the joint venture company as if the company were a member of the venturing group.
(2) If a notice is given under section 586(2), this Part applies in relation to the property rental business carried on by the joint venture company as if the venturing company and the joint venture company were the members of a new group UK REIT (a “deemed UK REIT”).
(3) For the purposes of subsections (1) and (2) references in this Part to a company which is a member of a group UK REIT include references to—
(a) the joint venture company, and
(b) in a case within subsection (2), the venturing company.
(4) For the purposes of subsection (3)—
(a) references in this Part to a UK company which is a member of a group UK REIT include references to a joint venture company which—
(i) is UK resident, and
(ii) is not resident in another place in accordance with the law of that place relating to taxation, and
(b) references in this Part to a non-UK company which is a member of a group UK REIT include references to a joint venture company which is not within paragraph (a).
(5) For the purposes of subsections (1) and (2) any reference in this Part to—
(a) entry, or
(b) a company becoming a member of a group UK REIT,
is to be read in relation to the joint venture company as a reference to the date specified under section 586(6)(c).
(6) For the purposes of subsection (2)—
(a) references in this Part to a UK REIT (or group UK REIT) include references to the deemed UK REIT, and
(b) references in this Part to the principal company of a group are to be read as references to the venturing company.
(7) Subsections (3) to (6) apply (in particular) for the purpose of interpreting section 549A(6)(a)(i) and (8)(a)(i).
(1) If a notice is given under section 587(1), this Part applies in relation to the property rental business carried on by the member or members of the joint venture group as if each member of the group were a member of the venturing group.
(2) If a notice is given under section 587(2), this Part applies in relation to the property rental business carried on by the member or members of the joint venture group as if the venturing company and each member of the group were the members of a new group UK REIT (a “deemed UK REIT”).
(3) For the purposes of subsections (1) and (2) references in this Part to a company which is a member of a group UK REIT include references to—
(a) each member of the joint venture group, and
(b) in a case within subsection (2), the venturing company.
(4) For the purposes of subsection (3)—
(a) references in this Part to a UK company which is a member of a group UK REIT include references to a member of the joint venture group if the member is—
(i) UK resident, and
(ii) not resident in another place in accordance with the law of that place relating to taxation, and
(b) references in this Part to a non-UK company which is a member of a group UK REIT include references to any member of the joint venture group not within paragraph (a).
(5) For the purposes of subsections (1) and (2) any reference in this Part to—
(a) entry, or
(b) a company becoming a member of a group UK REIT,
is to be read in relation to a member of a joint venture group as a reference to the date specified under section 587(6)(c).
(6) For the purposes of subsection (2)—
(a) references in this Part to a UK REIT (or group UK REIT) include references to the deemed UK REIT, and
(b) references in this Part to the principal company of a group are to be read as references to the venturing company.
(7) Subsections (3) to (6) apply (in particular) for the purpose of interpreting section 549A(6)(a)(i) and (8)(a)(i).
(1) A notice given under section 586(1) ceases to have effect if—
(a) the venturing group ceases to meet either of the 40% tests in relation to the joint venture company, or
(b) the venturing group ceases to be a UK REIT.
(2) A notice given under section 586(2) ceases to have effect if—
(a) the venturing company ceases to meet either of the 40% tests in relation to the joint venture company, or
(b) the venturing company ceases to be a UK REIT.
(3) A notice given under section 587(1) ceases to have effect if—
(a) the venturing group ceases to meet the 40% tests in relation to the joint venture group, or
(b) the venturing group ceases to be a UK REIT.
(4) A notice given under section 587(2) ceases to have effect if—
(a) the venturing company ceases to meet the 40% tests in relation to the joint venture group, or
(b) the venturing company ceases to be a UK REIT.
(5) If a notice under section 586 or 587 ceases to have effect, this Part ceases to apply as mentioned in section 588 or 589 (as the case may be) in relation to the joint venture company or joint venture group.
(6) But section 581 (early exit) continues to apply to a joint venture company or to the members of a joint venture group despite subsection (5).
(7) For the meaning of “the 40% tests” see—
(a) section 586, in the case of a notice given under that section, and
(b) section 587, in the case of a notice given under that section.
(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.
(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.
593 Financial 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.
(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”.
(1) References in this Chapter to an “equity holder”, in relation to a company, are to a person who—
(a) holds ordinary shares in the company, or
(b) is a loan creditor of the company in relation to a loan other than a normal commercial loan (as defined by section 162).
(2) Percentages of beneficial interest for the purposes of this Chapter are to be determined by reference to beneficial entitlement to profits available for distribution to equity holders.
(3) References in this Part to property rental business, in relation to a joint venture company or a company which is a member of a joint venture group, do not include the letting of property by the company to (as the case may be)—
(a) the venturing company in respect of the company, or
(b) a member of the venturing group in respect of the company.
(1) This section is about the calculation of profits for the purposes of any provision of this Part which provides that profits are to be calculated in accordance with this section.
(2) Profits are to be calculated in the same way as profits of a UK property business are calculated for the purposes of the charge to tax under Chapter 3 of Part 4 of CTA 2009 (as to which see, in particular, section 210 of that Act).
(3) Section 211(1) of CTA 2009 (property businesses: disregard of credits and debits from loan relationships and derivative contracts) does not apply in respect of—
(a) a loan relationship so far as it relates to property rental business,
(b) a hedging derivative contract so far as it relates to property rental business, or
(c) embedded derivatives so far as the host contract is entered into for the purposes of property rental business.
(4) For the purposes of subsection (3)—
(a) a derivative contract is hedging in relation to a company so far as—
(i) it is acquired as a hedge of risk in relation to an asset by the exploitation of which property rental business is conducted, or
(ii) it is acquired as a hedge of risk in relation to a liability incurred in connection with property rental business,
(b) a designation of a contract as wholly or partly hedging for the purposes of a company's accounts is conclusive,
(c) “embedded derivatives” is to be read in accordance with section 584 or 586 (as the case may be) of CTA 2009, and
(d) “the host contract” means—
(i) the contract mentioned in section 584(1)(a) of CTA 2009, or
(ii) the contract mentioned in section 586(1)(a) of that Act,
as the case may be.
(5) In subsection (4)(a)(i) the reference to an asset includes a reference to—
(a) the value of an asset, and
(b) profits attributable to it.
(6) Profits are to be calculated without regard to items giving rise to credits or debits which would be within Part 7 of CTA 2009 (derivative contracts) but for section 589(2)(b) and (c) of that Act (exclusion of share-based and unit trust-based contracts).
(7) Income and expenditure relating partly to property rental business and partly to residual business are to be apportioned on a just and reasonable basis.
(8) Section 3(1) of CAA 2001 (claims for capital allowances) does not apply; and any allowance which could be claimed under that provision is to be made automatically and reflected in the calculation of profits.
(9) No account is to be taken of Part 7ZA of this Act (restrictions on obtaining certain deductions in respect of carried-forward losses).
599A Amount of distribution consisting of share capital issued in lieu of cash dividend
(1) For the purposes of this Part, the amount of a distribution, so far as it consists of share capital issued in lieu of a cash dividend, is the cash equivalent of the share capital.
(2) Section 412(1), (2), (4) and (5) of ITTOIA 2005 (meaning of “cash equivalent of share capital”) applies for the purposes of this section as it applies in relation to share capital issued as mentioned in section 410(1)(a) of that Act.
600 Power to make regulations about cases involving related persons
(1) If they consider it expedient in the public interest the Treasury may make regulations about the application of this Part to activities or situations which involve, or arise in connection with, a relationship between a REIT company and another person.
(2) In subsection (1) “REIT company” means—
(a) a company UK REIT, or
(b) a company which is a member of a group UK REIT.
(3) The regulations may, in particular—
(a) treat a specified person, or a person in specified circumstances, as forming part of a group UK REIT for specified purposes;
(b) provide for a specified provision which applies in respect of a members of a group UK REIT also to apply, with or without modifications, in respect of a specified person or a person in specified circumstances.
(4) Regulations under this section may make provision in relation to accounting periods ending on or after the date on which the regulations are made.
(5) No regulations may be made under this section unless a draft of the statutory instrument containing them has been laid before and approved by a resolution of the House of Commons.
(1) In the application of a provision specified in subsection (2) to a group of companies, the group so far as it carries on property rental business while it is a UK REIT is to be treated as a separate group, distinct from—
(a) the pre-entry group,
(b) the group so far as it carries on residual business while it is a UK REIT, and
(c) the post-cessation group.
(2) The provisions mentioned in subsection (1) are—
(a) section 171 of TCGA 1992 (transfer of assets within group),
(b) sections 171A to 171C of TCGA (reallocation of gain or loss within group),
(c) sections 179A and 179B of TCGA 1992 (degrouping: reallocation of gain or loss, or rollover of gain, within group),
(d) Chapters 4 and 6 to 8 of Part 5 of CTA 2009 (loan relationships),
(e) Part 7 of that Act (derivative contracts),
(f) Part 8 of that Act (intangible assets), ...
(g) Part 5 of this Act (group relief), and
(h) Part 5A of this Act (group relief for carried-forward losses)
A deemed disposal and reacquisition of an asset under this Part is to be taken into account for the purposes of any subsequent disposal (whether actual or deemed).
Regulations under this Part—
(a) may make provision which applies generally or only in specified cases or circumstances,
(b) may make different provision for different cases or circumstances, and
(c) may contain incidental, supplemental, consequential and transitional provision and savings.
604 Property rental business: exclusion of listed business
(1) Business of a class listed in the table in subsection (2) is not property rental business.
(2) This is the table—
Class | Description
Class 1 | Incidental letting of property (whether in the United Kingdom or elsewhere) which is held in connection with a trade in property.
Class 2 | Letting of property which is held for use for administrative purposes in carrying on property rental business but is temporarily surplus to requirements for those purposes, so long as— the space let is small compared to the space occupied for administrative purposes, and the letting is for a term of not more than 3 years.
Class 3 | Letting of property if the property would fall in accordance with generally accepted accounting practice to be described as owner-occupied (but see subsection (3)).
Class 4 | The provision of services in connection with property outside the United Kingdom where the services would not fall within Chapter 3 of Part 4 of CTA 2009 if provided in connection with property in the United Kingdom.
Class 5 | Entering into arrangements which are such that a finance arrangement code (within the meaning given by section 770(2) of this Act or section 809BZM(2) of ITA 2007) applies (factoring of income etc: finance arrangements).
(3) For the purposes of class 3, ignore the fact that a property may fall to be described as owner-occupied merely because of the provision by the company of services to an occupant who—
(a) is in exclusive occupation of the property, and
(b) is not connected with a member of the group.
(4) The Commissioners for Her Majesty's Revenue and Customs may by regulations—
(a) add a class to the table in subsection (2),
(b) amend a class (or provision made in relation to it) or make such provision in relation to a class as the Commissioners consider appropriate, or
(c) remove a class from the table (or provision made in relation to it).
605 Property rental business: exclusion of business producing listed income
(1) Business is not property rental business so far as it gives rise to income of a class listed in the table in subsection (2).
(1A) But see section 549A which treats income falling within class 7 of the table as profits of property rental business.
(2) This is the table—
Class | Description
Class 1 | All income in connection with the operation of a caravan site, if section 20(1) of ITTOIA 2005 (caravan sites) would apply in respect of any receipts in connection with the operation of the site.
Class 2 | Rent in respect of an electric-line wayleave.
Class 3 | Rent in respect of the siting of a pipeline for gas.
Class 4 | Rent in respect of the siting of a pipeline for oil.
Class 5 | Rent in respect of the siting of a mast or similar structure designed for use in a mobile telephone network or other system of electronic communication.
Class 6 | Rent in respect of the siting of a wind turbine.
Class 7 | Dividends from shares in— the principal company of a group UK REIT, or a company UK REIT.
Class 8 | Income arising out of an interest in a limited liability partnership where section 1273(4) of CTA 2009 (winding up) applies.
(2A) The reference in class 7 of the table in subsection (2) to dividends from shares includes share capital issued in lieu of a cash dividend (and the reference in subsection (1) to income is to be read accordingly).
(2B) Section 1051(2) to (4) (meaning of “share capital issued in lieu of a cash dividend”) applies for the purposes of subsection (2A) as it applies for the purposes of section 1049(1)(a).
(3) The Commissioners for Her Majesty's Revenue and Customs may by regulations—
(a) add a class to the table in subsection (2),
(b) amend a class (or provision made in relation to it) or make such provision in relation to a class as the Commissioners consider appropriate, or
(c) remove a class from the table (or provision made in relation to it).
(1) For the purposes of this Part a company (“the principal company”) and all its 75% subsidiaries form a group; and if any of those subsidiaries have 75% subsidiaries the group includes them and their 75% subsidiaries, and so on.
This is subject to subsection (2).
(2) A group does not include—
(a) a company (other than the principal company) which is not an effective 51% subsidiary of the principal company,
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or
(d) an open-ended investment company.
(3) A company cannot be a member of more than one group; and if a company would be a member of more than one group, section 170(6) of TCGA 1992 (capital gains tax: groups) applies to determine the group of which it is a member.
(4) Subsection (3) does not apply for the purposes of Chapter 10.
(5) In this section—
“effective 51% subsidiary” has the meaning given by section 170(7) of TCGA 1992 (groups of companies),
“75% subsidiary” has the meaning given by section 1154(3) (subsidiaries),
...
...
“open-ended investment company” has the meaning given by section 613.
(1) In this Part “entry” means—
(a) in the case of a group, the time when the group becomes a group UK REIT, and
(b) in the case of a company, the time when the company becomes, or becomes a member of, a UK REIT.
(2) In this Part “cessation” means—
(a) in the case of a group, the time when the group ceases to be a UK REIT, and
(b) in the case of a company, the time when the company ceases to be, or to be a member of, a UK REIT.
(3) In this Part, in relation to a group or company—
(a) references to the “pre-entry group” or “pre-entry company” are references to the group or company before entry, and
(b) references to the “post-cessation group” or “post-cessation company” are references to the group or company after cessation.
(1) A reference in this Part to an asset includes a reference to—
(a) part of an asset, and
(b) an interest in, or right in relation to, an asset.
(2) A reference in this Part to assets used in business of a company includes a reference to assets—
(a) which were acquired for the purpose of that business and which are not being used in another business,
(b) which are available for use in that business, or
(c) which are in any other way held in respect of, or associated or connected with, that business.
(3) For the purposes of this Part an asset is “involved” in a business if it is property involved in the business as described in section 529(4)(a).
In this Part—
“accounting period 1”, in relation to a company that is, or is a member of, a UK REIT, means the accounting period that begins on entry (in accordance with section 536(5)),
“company” has the meaning given by section 170(9) of TCGA 1992, and
“market value” has the same meaning as in TCGA 1992 (see sections 272 and 273 of, and Schedule 11 to, that Act).
610 Discretionary payments by trustees to companies
(1) This section applies if—
(a) the trustees of a settlement make a payment to a company,
(b) sections 494 and 495 of ITA 2007 (grossing up of trustees' discretionary payments etc) apply in relation to the payment,
(c) the company is chargeable to corporation tax, and
(d) the company is not excluded by subsection (2).
(2) A company is excluded if it is—
(a) a charitable company ...,
(b) an eligible body as defined in section 468, or
(c) a scientific research association as defined in section 469.
(3) If this section applies—
(a) none of the following applies in relation to the payment—
(i) section 967,
(ii) section 968, and
(iii) section 952 of ITA 2007 (set-off claims),
(b) the payment is to be ignored for the purpose of calculating the company's income for corporation tax purposes, and
(c) no repayment is to be made of the amount treated under section 494 of ITA 2007 as income tax paid by the company in relation to the payment.
(4) If the company is non-UK resident, this section applies only in relation to so much (if any) of the payment as is income of the company for corporation tax purposes.
(5) “Payment” includes payment in money's worth.
611 Income tax provisions to apply in relation to trustees' expenses
(1) This section applies in a case of a kind mentioned in section 499(1) of ITA 2007 (beneficiary entitled to some or all of the income arising to trustees of a settlement).
(2) In relation to the reduction of the beneficiary's income by reference to expenses of the trustees, sections 500 and 503 of ITA 2007 apply for corporation tax purposes as they apply for income tax purposes.
(1) This Chapter contains provision about taxation in relation to—
(a) open-ended investment companies (see sections 613 and 614),
(b) authorised unit trusts (see sections 616 to 618), and
(c) court investment funds (which are treated in accordance with section 620 as authorised unit trusts).
(2) The Chapter also includes provision about—
(a) open-ended investment companies which take the form of umbrella companies (see section 615), and
(b) authorised unit trust schemes which take the form of umbrella schemes (see section 619).
(3) The effect of the provision mentioned in subsection (2) is that, for the purposes of this Chapter, each part of the umbrella company or scheme is regarded as an open-ended investment company or authorised unit trust, but the umbrella company or scheme itself is not.
The rate of corporation tax in relation to an open-ended investment company for any financial year is the rate at which income tax at the basic rate is charged for the tax year beginning on 6 April in that financial year ... (and sections 18A and 18B (relief for companies with small profits) do not apply).
(1) In this section “umbrella company” means an open-ended investment company—
(a) whose instrument of incorporation provides arrangements for separate pooling of the contributions of the shareholders and the profits or income out of which payments are made to them, and
(b) whose shareholders are entitled to exchange rights in one pool for rights in another.
(2) References in this section to a part of an umbrella company are to a separate pool.
(3) For the purposes of this Chapter—
(a) each of the parts of an umbrella company is to be regarded as an open-ended investment company, and
(b) the umbrella company as a whole is not to be regarded as an open-ended investment company.
(4) The umbrella company as a whole is not to be regarded as a company for any other purpose of the Tax Acts unless an enactment expressly provides otherwise.
616 Meaning of “authorised unit trust” and “unit holder”
(1) In this Chapter “authorised unit trust” means, in relation to an accounting period, a unit trust scheme in respect of which an order under section 243 of FISMA 2000 is in force during the whole or part of the period.
(2) In this Chapter “unit holder” means a person entitled to a share of the investments subject to the trusts of a unit trust scheme.
(3) Subsections (1) and (2) are subject to section 619 (umbrella schemes).