IFM27025 - Real Estate Investment Trust : Breaches of conditions: Company Conditions C (admitted to trading) and D ('not close') and other condition relating to shares (“listed” or traded): other breaches: CTA2010/S562(5) , S562A(4) and S562B(2)

Subject to the relaxations provided by CTA2010/S527(6) (relaxation of company condition D for first 3 years – see IFM22015) and S528B (relaxation of requirement to be “listed” or traded on a recognised stock exchange (RSE) for first 3 accounting periods - see IFM22010), and the provisions for breaches resulting from takeovers (see IFM27015) or, for condition D, the actions of others (see IFM27020), a  breach of company conditions C (shares admitted to trading on a RSE)  and D (‘not close’) or of the additional condition relating to shares (requirement to be “listed” or traded on a RSE), result in automatic termination with effect from the end of the accounting period before the one in which the breach occurred (CTA2010/S562(5), S562A(4) and S562B(2)). 

If there is a breach of condition D during the section 527(6) 3-year relaxation period, or of the ‘listed’ or traded condition during the S528B 3-accounting period relaxation period, the group/company transfers the property rental business, or part thereof, to another group/company, and the transferee group/company, taking account of the transferor’s breach, continues to breach the relevant condition for a period exceeding 3 years, then a notice may be given that the group/company is to be taken to have ceased as a UK-REIT on the first day of accounting period 1 of the transferee group/company or a later date specified in the notice. (CTA2010/S573A and S573B)