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HMRC internal manual

Guidance on Real Estate Investment Trusts

From
HM Revenue & Customs
Updated
, see all updates

Breaches of conditions: summary table

Condition breached Listing Close company 3 property 40% property value Distribution 75% asset test 75% profit test
               
Breach does not result in exit from regime Takeover of one UK-REIT by another 1. Takeover of one UK-REIT by another          
  1. Actions of someone other than company Any Only if not a necessary consequence of breaching “3 property” rule None* If ratio remains above 50% If ratio remains above 50%
      Time allowed to rectify breach to avoid exit None stated 1. None stated    
  2. End of next accounting period None stated None stated 3 months after profits finally determined** End of next accounting period after start of initial breach End of next accounting period after start of initial breach      
      Length of a “single breach” n/a n/a Up to end of next accounting period after start of initial breach Up to end of next accounting period after start of initial breach Measured by reference to accounting periods Measured by reference to accounting periods Measured by reference to accounting periods
      Number allowed in a ten year period n/a 1. n/a          
  3. None stated 2 2 Any number 2 for either condition
  • tax charge is levied on UK-REIT on deemed income equal to shortfall in distribution

**applies only where the shortfall is the result of an increase in the finally agreedprofits of the tax-exempt business compared with the amounts shown on the CTSAS return