Corporation Tax Act 2010 section 542

Disapplication of certain provisions

Section 542 disapplies the ring-fencing of overseas property losses and the transfer pricing exemption for small and medium-sized enterprises in relation to UK companies that are, or are members of, a UK REIT.

• Losses from overseas property business carried on by a UK REIT company are not ring-fenced — they can be set against other property rental business income.
• This overseas loss relief applies only to UK companies, because non-UK resident companies are not subject to UK tax on overseas property business profits.
• The transfer pricing exemption normally available to small and medium-sized enterprises does not apply to any UK company that is, or is a member of, a UK REIT.
• The removal of the SME transfer pricing exemption applies to both the property rental business and the residual business of the company.