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HMRC internal manual

Guidance on Real Estate Investment Trusts

From
HM Revenue & Customs
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Conditions and Tests: Company Conditions: summary

Before giving notice to join the regime, the company itself must meet two conditions, and once in the regime, the company must meet four further conditions throughout every accounting period that it is in the regime, (although two do not have to be met for all of the first day of the accounting period). They are set out in section 106 FA 2006.

The conditions for giving notice to join the regime are:

  1. that the company is UK resident,
  2. it must not be an open-ended investment company. and

The further conditions for remaining in the regime are:

  1. its shares must be listed on a recognised stock exchange.
  2. it must not be ‘close’,
  3. the only shares it can have in issue are a single class of ordinary share capital and various classes of relevant preference shares (see GREIT02015 for more detail), and
  4. it must not be party to any loan where the results are dependent on the profits of the business.

For more detail on conditions 1-3 see GREIT02010, and for conditions 4-6 see GREIT02015. For more detail on conditions 3 and 4 on entering the regime see GREIT03010.

Group REITs

Company Conditions 1 to 6 must be met by the principal company of a Group REIT (paragraph 5(1) Schedule 17 FA 2006).