Corporation Tax Act 2010 section 549A

Distributions from one UK REIT to another UK REIT

Section 549A establishes how distributions received by one UK Real Estate Investment Trust from another UK REIT are treated for tax purposes, introducing the concept of "UK REIT investment profits".

• When one UK REIT receives a qualifying distribution from another UK REIT, that distribution is treated as profits of a UK property rental business and classified as "UK REIT investment profits"
• These UK REIT investment profits are kept separate from any other property rental business profits the receiving company may have, but are included wherever Part 12 refers to property rental business profits
• Qualifying distributions include those from a group UK REIT's principal company or a company UK REIT to a shareholder that is either a member of another group UK REIT or a company UK REIT, provided they relate to property rental business profits
• The treatment only applies to distributions of exempt profits, and references to distributions by a principal company or company UK REIT also cover distributions made by the corresponding post-cessation entity