Leaving the REIT regime
D7.1140 Methods of leaving the REIT regime
A company can leave the REIT regime voluntarily, or HMRC can give notice for it to leave. In order to leave an official termination by notice must be given, either by the company or HMRC (as appropriate)1.
In addition to formally leaving the regime, where certain condition are breached, the regime will automatically cease to apply to the company, see D7.1108.
Termination by notice — Company
A company UK REIT may give notice (in writing) to HMRC that it wishes the regime to cease to apply to it. The date of leaving the regime is specified by the company and must be after the date of the notice2.
Termination by notice — HMRC
HMRC can give notice (in writing) to a company UK REIT that the regime will cease to apply to the company if3:
• over a 10 year period two notices under the 'Cancellation of a tax advantage' provisions have been issued , see D7.11074
• the company in is breach of Condition D (close company) or Condition C 'further conditions relating to shares' (see D7.1104) within the three year period of grace but in that timeframe transfers the rental business to another group/company which itself continues to breach Condition D/Condition C – the three year window is aggregated across the two companies and once the three year period is up, HMRC can give notice to the transferee5
• the company has breached the property rental condition, the distribution
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