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HMRC internal manual

Guidance on Real Estate Investment Trusts

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HM Revenue & Customs
Updated
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Group REITs: general definitions relating to the group

Definitions relating to the group (paragraph 2 Schedule 17 FA 2006)

G (pre-entry)

This is the group before it enters the regime. That is, the period up to, but not including, the first day of the accounting period of the principal company referred to in the section 109 notice.

G (property rental business)

This is the group after it enters the regime so far as it carries out property rental business that satisfies Conditions 1 to 3 of section 107 FA 2006, as modified by paragraph 6 Schedule 17. That includes the property rental business of all members of the group, regardless of their state of residence or location of property. G (property rental business) is made up of the part of each member of the group that carries on such property rental business.

The income and assets of this part of the group are used for the Balance of business Conditions in section 108 FA 2006, as modified by paragraph 7 Schedule 17.

G (residual)

This is the group after it enters the regime so far as it does not carry out tax-exempt property rental business. G (residual) is made up of the part of each member of the group that carries on activities that are not part of the tax-exempt business.

G (post-cessation)

This is the group after it has left the regime. That is, the period starting on the day after the date specified in the notice stating that Part 4 of FA 2006 is no longer to apply to the group. The notice may be given under sections 128, 129 or 130 FA 2006, as modified by paragraph 23 Schedule 17 FA 2006.

Other terms used to describe the group

G (tax-exempt)

This term is not used in the legislation but is useful shorthand to refer to the part of the group that gives rise to the UK profits of the group, as defined in paragraph 3 Schedule 17 (see GREIT11045). This means G (tax-exempt) is the UK resident group members so far as they carry on property rental business, regardless of the location of the property, and non-UK resident members of the group so far as they carry on UK property rental business.

The total income from this part of the group is used for the 90% distribution requirement in section 107 FA 2006, as modified by paragraph 6(4) Schedule 17. As such, it describes the part of the group that carries on tax-exempt business.