Corporation Tax Act 2010 section 562

Breach of condition C in section 528 (conditions for company)

Section 562 deals with what happens when a UK REIT breaches condition C (the requirement that its shares are listed on a recognised stock exchange) and sets out when such a breach can be ignored and when it results in loss of UK REIT status.

• A breach of condition C is ignored if it arises because the principal company of a group UK REIT joins another group UK REIT, or a company UK REIT becomes a member of a group UK REIT.
• Where a breach of condition C occurs in an accounting period and does not fall within the permitted exceptions, the group or company is treated as having ceased to be a UK REIT at the end of the previous accounting period.
• The consequences of losing UK REIT status take effect retrospectively from the end of the accounting period before the one in which the breach occurred.
• This section is subject to section 572, which allows HMRC to issue a notice terminating UK REIT status in certain circumstances.