Corporation Tax Act 2010 section 553

Meaning of "holder of excessive rights" and "excluded holder"

Section 553 defines what it means to be a "holder of excessive rights" and an "excluded holder" in the context of distributions made by a UK REIT, determining which large shareholders may face additional tax consequences.

• A holder of excessive rights is a company or equivalent body corporate that holds at least 10% of a UK REIT's distributions, share capital, or voting rights.
• The 10% threshold can be met directly or indirectly through beneficial entitlement to distributions, share capital, or control of voting rights.
• An excluded holder is a holder of excessive rights who benefits from a double taxation treaty rate (unless that treatment is solely due to the size of their interest) or who is entitled to receive distributions gross under the relevant regulations.
• A body treated as a corporate entity under a foreign double taxation agreement given effect by an Order in Council can also qualify as a holder of excessive rights, even if it is not strictly a UK company.