Corporation Tax Act 2010 section 534

Profits

Section 534 sets out the corporation tax treatment of profits from property rental business and residual business of UK Real Estate Investment Trusts (REITs) and their members.

• Profits from property rental business of a UK company that is, or is a member of, a UK REIT are exempt from corporation tax, and the same exemption applies to UK property rental profits of non-UK members of a group UK REIT.
• Profits from the residual (non-property-rental) business of a UK REIT company that are subject to corporation tax must be charged at the main rate, with no access to the small profits rate.
• Where a percentage of property rental profits is excluded from a group REIT member's financial statements because of non-member ownership, that percentage is re-categorised as residual business profits and taxed at the main corporation tax rate.
• The calculation of property rental profits for the purposes of the corporation tax exemption must follow the method set out in section 599 of the Act.