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HMRC internal manual

Investment Funds Manual

Real Estate Investment Trust : Joint ventures: Joint Venture Look-Through Notice: requirements : CTA2010/S586 and S587

Provided the venturing company/group and the joint venture company or principal company of the joint venture group agree and meet the necessary conditions, a Notice can be given for provisions in CTA2010/Part 12/Chapter 10 to apply to the joint venture company/group.  In the case of a Group REIT, the principal company must give the notice on behalf of the group. 

Joint election required

In both cases, the notice must be given with the consent of the joint venture company or principal company of the joint venture group. This is to ensure that the joint venture company is aware of the constraints relating to conduct of its business. 

Timing and duration

The notice must be given before the date from which the ‘look-through’ treatment is to apply.

The notice continues in effect until the interests of the venturing company or group falls below 40% or the venturing company or group ceases to be a UK REIT (CTA2010/S590). 

Multiple ventures and venturers

A Joint Venture Look-Through notice applies in respect only of the named venturing company or group and the named joint venture company or group.  If the venturing company or group is involved in other joint ventures, a separate notice is required in respect of each of them, although the venturing company or group need prepare only one set of financial statements in respect of all of its joint ventures.  Note that the principal company of a joint venture group must prepare financial statements in addition to those required by CTA2010/S532. (see S592(6) and IFM30027)

It is possible for a joint venture company or group to have more than one look through notice served in respect of it and for a share of its results to be aggregated with more than one UK-REIT. If there is another 40% shareholder, and that person is also UK-REIT, if they want ‘look-through’ treatment to apply in respect of their interest in the joint venture company or group, they need to give a separate notice.