IFM30050 - Real Estate Investment Trust : Joint ventures: Joint Venture Look-Through Notice: miscellaneous

Venturing company becomes Principal Company of venturing group

Where a venturing company becomes the principal company of a Group REIT, if it and the joint venture company or joint venture group want the ‘look-through’ treatment to continue, a new venturing group ‘look-through’ notice has to be given.    

Joint venture company joins the group  

If the venturing company’s interest has increased such that the joint venture is now a member of a group headed by the venturing company (i.e. is more than 75%), the venturing company may give notice that it and the members of its group are joining the regime as a Group REIT.  

Joint venture is a non-resident company/group

There are no restrictions on the country of residence of the joint venture.  CTA2010/S588 and S589 apply the REIT legislation to joint ventures. The same conditions for giving notice apply as for UK resident joint ventures. 

As with non-resident members of the Group REIT, the relevant portion of the assets, profits etc of the non-resident joint venture company/group are brought into account for the Balance of Business and property rental business conditions.  The relevant portion is the interest in the joint venture company/group held by the venturing company or group. 

The relevant portion of the profits of the UK property rental business of the joint venture is exempt from UK tax.  The income is included in the amount out of which the venturing company (or principal company of a venturing group) must pay its distribution as a PID.

Dividends paid by the joint venture to UK group members are exempt from tax in the hands of the UK holding company to the extent they fall within the dividend exemption in CTA2009/Part 9A. 

The Non Residents Landlord Scheme does not apply to the rents paid by UK tenants to a non-resident joint venture in respect of which a ‘look-through’ notice is effective, to the extent the rents are attributable to the REITs holding. 

These concepts are explained in more detail in IFM30025 onwards.