Commentary

D8.132 Qualifying conditions

Corporate tax
Corporate tax | Commentary

D8.132 Qualifying conditions

Corporate tax | Commentary

D8.132 Qualifying conditions

In order to be eligible for the property authorised investment fund regime the following conditions must be satisfied1

  1.  

    (a)     the property investment business condition;

  2.  

    (b)     the genuine diversity of ownership condition;

  3.  

    (c)     the corporate ownership condition;

  4.  

    (d)     the loan creditor condition;

  5.  

    (e)     the balance of business condition; and

  6.  

    (f)     the notification condition.

Property investment business condition

This requires that the following conditions be satisfied throughout the accounting period2

  1.  

    (a)     the company's instrument of incorporation and prospectus include a statement that the company's investment objectives are to carry on 'property investment business' and manage cash raised from investors for that purpose; and

  2.  

    (b)     the company carries on property investment business.

For accounting periods beginning on or after 1 April 2014 a 'property investment business' is defined3 as a business consisting of any one or more of the following: property rental business, owning shares in UK-REITs4 or owning shares in an entity which is the foreign equivalent of a UK REIT5.

For accounting periods beginning before 1 April 2014 a property investment business is a business consisting of any one or more of the following: property rental business, owning shares in UK-REITs or owning shares or units in an entity which meets the following conditions―

  1.  

    (i)     the entity is a property company or unit trust scheme (or something similar) which is not a collective investment scheme, has defined capital, is listed on a recognised stock exchange and there is no obligation on the manager of the scheme to provide opportunities for redemption

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial