Corporation Tax Act 2010 section 518

Introduction to Part

Section 518 provides an overview of the UK Real Estate Investment Trust (REIT) regime, explaining the tax exemptions available for qualifying property rental businesses and the corresponding obligations that come with REIT status.

• A group of companies or a single company carrying on a property rental business may elect for UK REIT status if it meets specified requirements, gaining exemption from corporation tax on rental profits and gains
• In return for the tax exemption, the REIT must pay an entry charge, deduct income tax from distributions to shareholders, and those distributions are treated as property business income rather than dividends in shareholders' hands
• The regime covers entry and exit consequences, rules on assets, distributions and gains, consequences of failing to meet ongoing requirements, and special provisions for joint ventures
• A "UK REIT" can be either a group UK REIT (a group of companies) or a company UK REIT (a single company)