Corporation Tax Act 2010 section 530

Condition as to distribution of profits

Section 530 sets out the profit distribution requirements that a UK REIT (whether a group or a single company) must satisfy in each accounting period to maintain its REIT status.

• A UK REIT must distribute all of its UK REIT investment profits and at least 90% of the remainder of its UK property rental profits for each accounting period, by the filing date for the relevant tax return.
• Distributions can take the form of cash dividends or share capital issued in lieu of a cash dividend; where a distribution is withheld solely to avoid a tax charge on a holder of excessive rights, it is treated as having been made.
• The distribution requirement is disapplied to the extent that compliance would be unlawful under UK legislation (including Northern Ireland and Scottish legislation) or prescribed overseas legislation.
• Where the condition would only be breached because stock dividends are revalued to market value, the deadline for distributions is extended to six months after the normal filing date.