Corporation Tax Act 2010 section 548

Distributions: liability to tax

Section 548 sets out how distributions from a UK REIT's property rental business are taxed in the hands of shareholders, treating them as UK property business income rather than as dividend income.

• Distributions of property rental profits or gains from a UK REIT (whether a group or a single company) are re-characterised as UK property business income in the shareholder's hands, rather than being treated as dividends.
• This re-characterisation applies regardless of whether the shareholder is subject to corporation tax or income tax, provided the distribution is a distribution of exempt profits as defined by reference to the attribution rules in section 550.
• Non-UK resident shareholders receiving these distributions are not subject to the non-resident landlord withholding regime; instead, separate income tax deduction rules under sections 973 and 974 of the Income Tax Act 2007 apply.
• The section does not apply to distributions of exempt profits that fall within section 549A(6) or (8), which deals with distributions made from one UK REIT to another UK REIT.