|
|
REITS.
|
41.— The Principal Act is amended—
|
|
| |
(a) in section 153 by inserting the following after subsection (4):
|
|
| |
“(4A) Subsection (4) shall not apply to a property income dividend (within the meaning of section 705A).”,
|
|
| |
(b) in section 172D by inserting the following after subsection (3A):
|
|
| |
“(3B) Subsections (2) and (3) shall not apply to a property income dividend (within the meaning of section 705A).”,
|
|
| |
and
|
|
| |
(c) by inserting the following Part after Part 25:
|
|
| |
“PART 25A
|
|
| |
Real Estate Investment Trusts
|
|
| |
Interpretation and application.
|
|
| |
705A.— In this Part—
|
|
| |
‘aggregate income’, in relation to a company or group, means the aggregate profits of the company or group, as the case may be, as—
|
|
| |
(a) reduced by the aggregate net gains of the company or group, as the case may be, where aggregate net gains arise, or
|
|
| |
(b) increased by the aggregate net losses of the company or group, as the case may be, where aggregate net losses arise;
|
|
| |
‘aggregate net gains’, in relation to a company or group, means the amount by which the sum of the gains recognised in arriving at the aggregate profits of the company or group, as the case may be, being gains which arise on the revaluation or disposal of investment property or other non-current assets, exceeds the sum of the losses so recognised, being losses which arise on such revaluation or disposal;
|
|
| |
‘aggregate net losses’, in relation to a company or group, means the amount by which the sum of the losses recognised in arriving at the aggregate profits of the company or group, as the case may be, being losses which arise on the revaluation or disposal of investment property or other non-current assets, exceeds the sum of the gains so recognised, being gains which arise on such revaluation or disposal;
|
|
| |
‘aggregate profits’, in relation to a company or group, means the profit that is stated in accounts of the company or consolidated accounts of the group, as the case may be, being accounts made up in accordance with relevant accounting standards, or, where such accounts or consolidated accounts, as the case may be, have not been made up, the profits which would be so stated if such accounts or consolidated accounts, as the case may be, were made up in accordance with those standards;
|
|
| |
‘authorised officer’ means an officer of the Revenue Commissioners authorised by them in writing to exercise the powers conferred by this Part;
|
|
| |
‘control’ shall be construed in accordance with section 432;
|
|
| |
‘distribution’ has the same meaning as in the Corporation Tax Acts;
|
|
| |
‘group’ means a group of companies comprising a holding company and its wholly-owned subsidiaries and a reference to a member of a group shall be construed as a reference to any company in the group;
|
|
| |
‘group Real Estate Investment Trust’ means a group, where—
|
|
| |
(a) the principal company of that group:
|
|
| |
(i) has given a notice under section 705E, and
|
|
| |
(ii) complies with the conditions in section 705B(1)(a),
|
|
| |
and
|
|
| |
(b) the group complies with the conditions in section 705B(1)(b),
|
|
| |
and any references to ‘group REIT’ shall be construed accordingly;
|
|
| |
‘holding company’ means a company that holds another company as its wholly-owned subsidiary and, for the purpose of this definition and for the purpose of the immediately preceding definition, a company shall be a wholly-owned subsidiary of another company if and so long as 100 per cent of its ordinary share capital is directly owned by that other company;
|
|
| |
‘market value’ shall be construed in accordance with section 548;
|
|
| |
‘principal company’ means the company within a group that gives a notice to the Revenue Commissioners under section 705E(2);
|
|
| |
‘property income’, in relation to a company or group, means the property profits of the company or group, as the case may be, as—
|
|
| |
(a) reduced by the property net gains of the company or group, as the case may be, where property net gains arise, or
|
|
| |
(b) increased by the property net losses of the company or group, as the case may be, where property net losses arise;
|
|
| |
‘property income dividend’ means a dividend paid by a REIT or the principal company of a group REIT, as the case may be, from its property income;
|
|
| |
‘property net gains’, in relation to a company or group, means the amount by which the sum of the gains recognised in arriving at the aggregate profits of the company or group, as the case may be, being gains which arise on the revaluation or disposal of investment property or other non-current assets which are assets of the property rental business, exceeds the sum of the losses so recognised, being losses which arise on such revaluation or disposal;
|
|
| |
‘property net losses’, in relation to a company or group, means the amount by which the sum of the losses recognised in arriving at the aggregate profits of the company or group, as the case may be, being losses which arise on the revaluation or disposal of investment property or other non-current assets which are assets of the property rental business, exceeds the sum of the gains so recognised, being gains which arise on such revaluation or disposal;
|
|
| |
‘property profits’, in relation to a company or group, means an amount which is the lesser of—
|
|
| |
(a) the amount which would be the aggregate profits of the company or group, as the case may be, if the residual business, if any, of the company or group, as the case may be, were disregarded, and
|
|
| |
(b) the aggregate profits of that company or group, as the case may be;
|
|
| |
‘property rental business’ means a business which is carried on by a REIT or a group REIT, as the case may be, for the sole purpose of generating rental income in the State or outside the State, and, for the purpose of this definition, such businesses of a group are to be treated as a single business;
|
|
| |
‘qualifying investor’ in relation to a REIT or a group REIT, as the case may be, means—
|
|
| |
(a) an investment undertaking within the meaning of section 739B(1), or
|
|
| |
(b) a person referred to in paragraph (a), (b), (f) or (ka) of section 739D(6);
|
|
| |
‘Real Estate Investment Trust’ means a company which—
|
|
| |
(a) has given a notice under section 705E, and
|
|
| |
(b) complies with the conditions in section 705B(1),
|
|
| |
and any references to ‘REIT’ shall be construed accordingly;
|
|
| |
‘recognised stock exchange’ means a stock exchange in a Member State, being a stock exchange which—
|
|
| |
(a) is regulated by the appropriate regulatory authority of that Member State, and
|
|
| |
(b) other than in the case of the Irish Stock Exchange, has substantially the same level of recognition in that Member State as the Irish Stock Exchange has in the State;
|
|
| |
‘relevant accounting standards’ has the meaning assigned to it in Schedule 17A;
|
|
| |
‘rental income’ means any rent-charge or payment in the nature of rent in respect of—
|
|
| |
(a) residential premises within the meaning of section 96(1), and
|
|
| |
(b) any building other than such residential premises;
|
|
| |
‘residual business’, in relation to a REIT or a group REIT, means any business carried on by the REIT or group REIT, as the case may be, which is not property rental business;
|
|
| |
‘specified accounting period’ means the accounting period in which the company or principal company, as the case may be, gives a notice under section 705E;
|
|
| |
‘specified debt’ means any debt incurred by a REIT or group REIT in respect of monies borrowed by, or advanced to, the REIT or group REIT, as the case may be;
|
|
| |
‘specified return date for the accounting period’ has the same meaning as in section 959A;
|
|
| |
‘the Acts’ means the Tax Acts and the Capital Gains Tax Acts.
|
|
| |
Conditions for notice under section 705E.
|
|
| |
705B.— (1) Subject to subsections (2) and (3), the notice referred to in section 705E shall contain a statement to the effect that—
|
|
| |
(a) each of the following conditions, in relation to a REIT or the principal company of a group REIT, as the case may be, is met throughout the specified accounting period, namely—
|
|
| |
(i) it is resident in the State and not resident in another territory,
|
|
| |
(ii) it is incorporated under the Companies Acts,
|
|
| |
(iii) its shares are listed on the main market of a recognised stock exchange in a Member State, and
|
|
| |
(iv) it is not a close company within the meaning of Chapter 1 of Part 13,
|
|
| |
and
|
|
| |
(b) each of the following conditions, in relation to a REIT or group REIT, as the case may be, is reasonably expected to be met at the end of the specified accounting period, namely—
|
|
| |
(i) at least 75 per cent of the aggregate income of the REIT or group REIT derives from carrying on property rental business,
|
|
| |
(ii) it conducts property rental business consisting of at least three properties, the market value of no one of which is more than 40 per cent of the total market value of the properties constituting the property rental business,
|
|
| |
(iii) it maintains a property financing costs ratio (within the meaning of section 705H(1)) of at least 1.25:1,
|
|
| |
(iv) at least 75 per cent of the aggregate market value of the assets of the REIT or group REIT relates to assets of the property rental business of the REIT or group REIT, as the case may be,
|
|
| |
(v) it ensures that the aggregate of the specified debt shall not exceed an amount equal to 50 per cent of the aggregate market value of the assets of the business or businesses of the REIT or group REIT, as the case may be, and
|
|
| |
(vi) subject to having sufficient distributable reserves, it distributes to the shareholders of the REIT or the shareholders of the principal company of the group REIT, as the case may be, at least 85 per cent of the property income for each accounting period of the REIT or group REIT, as the case may be, by way of property income dividend, on or before the specified return date for the accounting period in relation to the REIT, or the principal company of the group REIT, as the case may be.
|
|
| |
(2) Each of the conditions in subparagraphs (iii) and (iv) of subsection (1)(a) shall be regarded as having been met throughout the specified accounting period if that condition is met within the period of three years commencing on the date on which the company or group becomes a REIT, or group REIT, as the case may be.
|
|
| |
(3) The condition in subparagraph (ii) of subsection (1)(b) shall be regarded as having been met at the end of the specified accounting period if that condition is met within the period of three years commencing on the date on which the company or group becomes a REIT, or group REIT, as the case may be.
|
|
| |
(4) Subparagraph (iv) of subsection (1)(a) shall not apply to a REIT or a group REIT, as the case may be, which is under the control of persons who are qualifying investors.
|
|
| |
Conditions regarding shares.
|
|
| |
705C.— (1) In this section—
|
|
| |
‘ordinary shares’ means shares other than preference shares;
|
|
| |
‘preference shares’ means shares which do not carry any right to dividends other than dividends at a rate per cent of the nominal value of the shares which is fixed, and which carry rights in respect of dividends and capital which are comparable with those general for fixed-dividend shares quoted on a stock exchange in the State.
|
|
| |
(2) Each share issued by a REIT or the principal company of a group REIT, as the case may be, shall either—
|
|
| |
(a) form part of its ordinary share capital, or
|
|
| |
(b) be a preference share with no voting rights attaching to it.
|
|
| |
(3) No more than one class of ordinary share shall be issued by a REIT or by the principal company of a group REIT, as the case may be.
|
|
| |
Conditions regarding an accounting period.
|
|
| |
705D.— Subject to subsections (2) and (3) of section 705B, where a notice has been given under section 705E by—
|
|
| |
(a) a company, all of the conditions in section 705B(1) must continue to be met by that company for each accounting period following the specified accounting period until a notice has been issued in accordance with section 705O,
|
|
| |
(b) a principal company in respect of a group, the conditions in section 705B(1)(a) must continue to be met by that principal company for each accounting period following the specified accounting period until a notice has been issued in accordance with section 705O, and
|
|
| |
(c) a principal company in respect of a group, the conditions in section 705B(1)(b) must continue to be met by that group for each accounting period following the specified accounting period until a notice has been issued in accordance with section 705O.
|
|
| |
Notice to become a Real Estate Investment Trust.
|
|
| |
705E.— (1) A company shall not be a REIT unless it gives a notice to the Revenue Commissioners under this section.
|
|
| |
(2) A group shall not be a group REIT unless a company (in this Part referred to as the ‘principal company’) which is a member of that group gives a notice to the Revenue Commissioners under this section.
|
|
| |
(3) (a) A notice under this section is a notice in writing specifying a date on or after 1 January 2013—
|
|
| |
(i) from which the company is to be a REIT, or
|
|
| |
(ii) from which the group is to be a group REIT,
|
|
| |
being a date that is not earlier than the date of the notice given under subsection (1) or subsection (2), as the case may be, and
|
|
| |
(b) the notice shall, in the case of a group REIT, list all of the members of the group, to each of which the group REIT designation will apply.
|
|
| |
(4) The date from which a company or group shall be a REIT or a group REIT, as the case may be, shall be the date—
|
|
| |
(a) on or after 1 January 2013, as specified in a notice under subsection (3), and
|
|
| |
(b) from which the company or group, as the case may be, meets, or is regarded as having met, the conditions of section 705B.
|
|
| |
Duration of Real Estate Investment Trust.
|
|
| |
705F.— A company or group shall not be a REIT or a group REIT, as the case may be, after the date specified in a notice issued in accordance with section 705O to the company or group, as the case may be.
|
|
| |
Charge to tax.
|
|
| |
705G.— (1) Notwithstanding anything in the Acts, but subject to the provisions of this Part, a company which is a REIT or a member of a group REIT shall not be chargeable to tax in respect of—
|
|
| |
(a) income of its property rental business, or
|
|
| |
(b) chargeable gains accruing on the disposal of assets of that property rental business.
|
|
| |
(2) Where a company or group, which is, or which, subsequent to such acquisition, becomes, a REIT or group REIT, as the case may be, acquires an asset which is used, or subsequent to such acquisition is used, for the purposes of its property rental business, and following that acquisition—
|
|
| |
(a) the asset is developed, the cost of which development exceeds 30 per cent of the market value of the asset at the date of commencement of the development, and
|
|
| |
(b) the asset is disposed of within the period of three years beginning with the completion of the development,
|
|
| |
then, notwithstanding the provisions of subsection (1), the profits arising therefrom, computed in accordance with the Tax Acts, shall be chargeable to corporation tax at the rate specified in section 21A.
|
|
| |
Profit: financing cost ratio.
|
|
| |
705H.— (1) In this section—
|
|
| |
‘property financing costs’ means costs, being costs of debt finance or finance leases for the purposes of property rental business, which are taken into account in arriving at aggregate profits, including amounts in respect of—
|
|
| |
(a) interest, discounts, premiums, or net swap or hedging costs, and
|
|
| |
(b) fees or other expenses associated with raising debt finance or arranging finance leases;
|
|
| |
‘property financing costs ratio’ means the ratio of the sum of property income and property financing costs of a company or group to the property financing costs of the company or group, as the case may be.
|
|
| |
(2) This section applies to a REIT or a group REIT if the property financing costs ratio of the REIT or group REIT, as the case may be, is less than 1.25:1 for an accounting period.
|
|
| |
(3) (a) Subject to paragraph (b), the REIT or the principal company of the group REIT, as the case may be, shall be charged to corporation tax under Case IV of Schedule D for the accounting period in respect of the amount by which the property financing costs of the REIT or group REIT, as the case may be, would have to be reduced for the property financing costs ratio to equal 1.25:1 for that accounting period.
|
|
| |
(b) The amount mentioned in paragraph (a) shall not exceed 20 per cent of the property income of the REIT or group REIT, as the case may be.
|
|
| |
(4) No loss, deficit, expense or allowance may be set off against the first-mentioned amount in subsection (3)(a) in charging that amount to corporation tax.
|
|
| |
Funds awaiting reinvestment.
|
|
| |
705I.— (1) This section applies where—
|
|
| |
(a) a REIT or group REIT disposes of a property of its property rental business, or
|
|
| |
(b) a REIT or a principal company, in the case of a group REIT, raises cash from the issue of ordinary share capital,
|
|
| |
and the REIT or group REIT, as the case may be, holds the proceeds.
|
|
| |
(2) (a) Profits arising from the investment of such proceeds, other than in property for the property rental business, shall be treated as property profits during the period of 24 months commencing on—
|
|
| |
(i) date of disposal, where subsection (1)(a) applies, or
|
|
| |
(ii) date of issue of ordinary share capital, where subsection (1)(b) applies,
|
|
| |
and as not being property profits thereafter.
|
|
| |
(b) Any apportionment of profits for the purpose of paragraph (a) shall be made in accordance with section 4(6).
|
|
| |
(3) Where the proceeds are held at any time after the date on which the period referred to in subsection (2) ends, the proceeds are to be treated as being assets of the residual business after that date.
|
|
| |
Taxation of shareholders.
|
|
| |
705J.— (1) This section applies where a REIT or group REIT, as the case may be, pays a property income dividend.
|
|
| |
(2) Subject to subsection (3), a shareholder within the charge to corporation tax shall, notwithstanding any other provision of the Tax Acts, be chargeable to corporation tax under Case IV of Schedule D in respect of a distribution referred to in subsection (1).
|
|
| |
(3) A property income dividend, received by a company which is a member of a group REIT from a company which is a member of the same group REIT, shall not be chargeable to corporation tax and the property income dividend shall not be taken into account in computing income for corporation tax of the first-mentioned company.
|
|
| |
(4) Notwithstanding the provisions of subsection (2), and subject to subsection (3), a shareholder within the definition of ‘qualifying company’ in section 110(1) shall be chargeable to corporation tax under Case III of Schedule D in respect of a distribution referred to in subsection (1).
|
|
| |
(5) Where, but for subsection (2) and section 129, a property income dividend would be income of a company which is income chargeable to tax under Case I of Schedule D, it shall be so chargeable notwithstanding those provisions.
|
|
| |
Taxation of certain shareholders.
|
|
| |
705K.— (1) In this section, and subject to subsection (2), ‘holder of excessive rights’ means a person, other than a qualifying investor, who—
|
|
| |
(a) is beneficially entitled, directly or indirectly, to at least 10 per cent of the distribution referred to in section 705B(1)(b)(iv),
|
|
| |
(b) is beneficially entitled to, or controls directly or indirectly—
|
|
| |
(i) at least 10 per cent of the share capital of, or voting rights in, the REIT, or
|
|
| |
(ii) in the case of a group REIT, to at least 10 per cent of the share capital of, or voting rights in, the principal company.
|
|
| |
(2) Where a shareholder becomes a holder of excessive rights in a company as a result of that company becoming a REIT or the principal company of a group REIT, then the provisions of subsection (3) will not apply for a period of three years commencing from the date specified by that company in accordance with section 705E(4).
|
|
| |
(3) Where a REIT or group REIT makes a distribution to a holder of excessive rights and the REIT or group REIT, as the case may be, has not taken reasonable steps to prevent the distribution to such a person being made, the REIT or the principal company of the group REIT, as the case may be, shall, notwithstanding the provisions of section 705G, be treated as receiving an amount of income equal to the amount of the distribution.
|
|
| |
(4) The amount of income referred to in subsection (3) shall be chargeable to corporation tax under Case IV of Schedule D and shall be treated as income—
|
|
| |
(a) arising in the accounting period in which the distribution is made, and
|
|
| |
(b) against which no loss, deficit, expense or allowance may be set off.
|
|
| |
Transfer of assets.
|
|
| |
705L.— (1) Where a company becomes a REIT, the assets of the company before it becomes a REIT shall be deemed, for the purposes of the Capital Gains Tax Acts, to have been—
|
|
| |
(a) sold by the company immediately before it becomes a REIT, and
|
|
| |
(b) reacquired by the company immediately on becoming a REIT,
|
|
| |
and such deemed sale and reacquisition shall be treated as being for a consideration equal to the market value of the assets on the date specified by the company, in accordance with section 705E(3)(a), in a notice under that section.
|
|
| |
(2) Where a group becomes a group REIT, the assets of each member of the group before it becomes a group REIT shall be deemed for the purposes of the Capital Gains Tax Acts, to have been—
|
|
| |
(a) sold by that member of the group immediately before the group becomes a group REIT, and
|
|
| |
(b) reacquired by that member of the group immediately on the group becoming a group REIT,
|
|
| |
and such deemed sale and reacquisition shall be treated as being for a consideration equal to the market value of the assets on the date specified by the principal company of the group, in accordance with section 705E(3)(a), in a notice under that section.
|
|
| |
(3) Where an asset of a REIT or group REIT, as the case may be, which is used for the purposes of the property rental business of the REIT or group REIT, as the case may be, ceases to be used for such purposes and begins to be used for the purposes of the residual business of the REIT or group REIT, as the case may be, the asset shall be deemed for the purposes of the Capital Gains Tax Acts, to have been—
|
|
| |
(a) sold by the REIT, or the relevant member of the group REIT, as the case may be, for that property rental business, and
|
|
| |
(b) acquired by the REIT, or the relevant member of the group REIT, as the case may be, for that residual business,
|
|
| |
at the date on which it ceases to be so used.
|
|
| |
(4) The deemed sale and acquisition in subsection (3) shall be treated as being for a consideration equal to the market value of the asset at the date referred to in subsection (3). A gain accruing to the property rental business as a result of subsection (3) shall, notwithstanding the provisions of section 705G, be a chargeable gain for the purposes of the Capital Gains Tax Acts.
|
|
| |
(5) Where an asset of a REIT or group REIT, as the case may be, which is used for the purposes of the residual business, ceases to be used for such purposes and begins to be used for the purposes of the property rental business, the asset shall be deemed for the purposes of the Capital Gains Tax Acts, to have been—
|
|
| |
(a) sold by the REIT, or the relevant member or members of the group REIT, as the case may be, for that residual business, and
|
|
| |
(b) acquired by the REIT, or the relevant member or members of the group REIT, as the case may be, for that property rental business,
|
|
| |
at the date on which it ceases to be so used, for a consideration equal to the market value of the asset on that date.
|
|
| |
Annual statement to Revenue.
|
|
| |
705M.— (1) Every REIT, or principal company in respect of a group REIT, shall, in respect of each accounting period, by 28 February in the year following the year in which the accounting period ends, make a statement to the Revenue Commissioners in electronic format approved by them, confirming that the conditions in section 705D have been met in relation to the REIT or group REIT, as the case may be, throughout the accounting period specified in the statement.
|
|
| |
(2) Where a REIT or principal company in respect of a group REIT, as the case may be, cannot make the statement referred to in subsection (1), it shall notify the authorised officer of the Revenue Commissioners and that notification shall—
|
|
| |
(a) state the date or dates on which the condition or conditions first ceased to be met and the date or dates (if any) on which the condition or conditions was or were met again,
|
|
| |
(b) give a description of the respects in which the condition or conditions was or were not met, and
|
|
| |
(c) give details of the steps (if any) taken to prevent a recurrence of the condition or conditions not being met.
|
|
| |
(3) Where a REIT, or principal company in respect of a group REIT—
|
|
| |
(a) within a reasonable time determined by the authorised officer, fails to secure that a condition referred to in subsection (2) is met, or
|
|
| |
(b) fails to make a statement required under subsection (1),
|
|
| |
then, the Revenue Commissioners may treat the REIT or group REIT, as the case may be, as having ceased to be a REIT or group REIT at the end of the accounting period immediately prior to the accounting period in which the failure to meet the condition, or make the statement required, began and may apply the provisions of section 705O.
|
|
| |
(4) Where a REIT, or principal company in respect of a group REIT—
|
|
| |
(a) makes an incorrect or incomplete statement under subsection (1), or
|
|
| |
(b) fails, without reasonable excuse, to make a statement under that subsection,
|
|
| |
then, the REIT, or principal company in respect of a group REIT, as the case may be, shall be liable to a penalty of €3,000. For the purposes of the recovery of a penalty under this subsection, section 1061 shall apply in the same manner as it applies for the purposes of the recovery of a penalty under any of the sections referred to in that section.
|
|
| |
Breach of conditions regarding distributions.
|
|
| |
705N.— Where for an accounting period a REIT or group REIT does notcomply with the provisions of section 705B(1)(b)(iv) in respect of the requirement to distribute at least 85 per cent of its property income—
|
|
| |
(a) the REIT or the principal company of the group REIT, as the case may be, shall be charged to corporation tax under Case IV of Schedule D in respect of an amount calculated by subtracting the amount of property income distributed in respect of that accounting period from the amount equal to 85 per cent of the property income of that accounting period, and
|
|
| |
(b) no loss, deficit, expense or allowance may be set off against the first-mentioned amount in paragraph (a) in charging that amount to corporation tax,
|
|
| |
but, where a company is restricted from making a distribution by reason of any provision of the Companies Acts, regard shall be had to such restriction in determining the amount, if any, chargeable to tax by virtue of paragraph (a).
|
|
| |
Cessation Notice.
|
|
| |
705O.— (1) Subsection (2) shall apply if a REIT or group REIT gives a notice in writing to the Revenue Commissioners specifying a date from which it will cease to be a REIT or group REIT, as the case may be.
|
|
| |
(2) The company or group shall cease to be a REIT or group REIT, as the case may be, at the date specified in the notice referred to in subsection (1).
|
|
| |
(3) The specified date shall be a date on or after the date of the notice referred to in subsection (1).
|
|
| |
(4) In accordance with section 705M(3), the authorised officer may by written notice state that any company or group shall cease to be a REIT or group REIT, as the case may be.
|
|
| |
(5) The date the company or group ceases to be a REIT or group REIT, as the case may be, shall be a date specified by the authorised officer in the notice referred to in subsection (4).
|
|
| |
(6) Where a notice is given under subsection (4), the REIT or group REIT to which the notice is given may, within 30 days from the date of such notice, appeal to the Appeal Commissioners and the Appeal Commissioners shall hear the appeal in all respects as if it were an appeal against an assessment.
|
|
| |
(7) The notice of appeal referred to in subsection (6) shall be given in writing to the authorised officer.
|
|
| |
Effect of cessation.
|
|
| |
705P.— (1) Where a notice is given under sections 705O(1) or (4), a company or group which has ceased to be a REIT or group REIT, as the case may be, is to be treated for corporation tax purposes as having ceased, at the date specified in the notice of cessation, to be a REIT or group REIT.
|
|
| |
(2) Where a notice is given under sections 705O(1) or (4), the assets of the REIT or group REIT, as the case may be, shall be deemed to have been disposed of by the REIT or the members of the group REIT, as the case may be, immediately before the cessation date and reacquired by the post-cessation company or members of the group, as the case may be, immediately after the cessation date, at the market value on that cessation date.
|
|
| |
Anti-avoidance provision.
|
|
| |
705Q.— (1) This Part shall not apply to any transaction engaged in by, or on behalf of, a REIT or group REIT, or to which it is directly, or indirectly, a party unless the transaction has been undertaken for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.
|
|
| |
(2) Where appropriate, a reference in subsection (1) to a REIT or a group REIT includes a reference to a company or a group before it has become, or after it has ceased to be, a REIT or a group REIT and, in the case of a group REIT, a company before it has become, or after it has ceased to be, a member of the group REIT.”.
|
