Corporation Tax Act 2010 section 552

The section 552 amount

Section 552 sets out how to calculate a specific tax charge amount that arises when a UK Real Estate Investment Trust (REIT) makes a distribution to a holder of excessive rights, as required by section 551.

• The calculation follows a three-step process, separately identifying distributions made on ordinary shares and preference shares.
• For each share class, the relevant profit distribution is multiplied by the percentage of rights attributable to the holder of excessive rights (or the recipient, if lower), and then adjusted by the ratio of the basic rate of income tax to the main rate of corporation tax.
• The profit figure used depends on whether the REIT is a group or a single company: for a group UK REIT it is the group's UK profits; for a company UK REIT it is the profits of the company's property rental business.
• The section 552 amount is the sum of the amounts calculated for ordinary shares and preference shares.