Commentary

D7.1108 Breach of conditions

Corporate tax
Corporate tax | Commentary

D7.1108 Breach of conditions

Corporate tax | Commentary

D7.1108 Breach of conditions

Certain conditions can be breached by a company UK REIT without the company being excluded from the REIT regime albeit that, further to the breach, the regime may apply to the company with certain modifications.

Although other breaches do lead to automatic termination.

Breaches – no automatic exclusion

There is not always an automatic exclusion from the REIT regime if a company breaches certain conditions, although they are subject to the termination by notice powers of HMRC contained in CTA 2010, s 5726 (see D7.1140). The relevant conditions are:

  1.  

    •     conditions C and D of the company conditions, ie those relating to being admitted to trading on a recognised stock exchange and not being a close company (D7.1104)1

  2.  

    •     the further condition relating to shares (D7.1104)2

  3.  

    •     the property rental business conditions (D7.1105)3

  4.  

    •     the distribution of profits condition (D7.1105A)4, and

  5.  

    •     the balance of business

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