Corporation Tax Act 2010 section 565

The section 565 amount

Section 565 explains how to calculate the shortfall amount when a UK REIT has not distributed enough of its property rental profits to meet the minimum distribution requirement.

• The shortfall (the "section 565 amount") is calculated as P minus D, where P is the minimum amount that should have been distributed and D is the amount actually distributed on time.
• For a group UK REIT, P is 90% of the group's UK property rental profits for the accounting period; for a company UK REIT, P is 90% of the company's property rental business profits for that period.
• D is the gross amount of those profits actually distributed within the statutory deadline or any later deadline agreed by an HMRC officer.
• Where profits increase after a tax return has been delivered, the definition of D must be read alongside the rules in section 530A, which may adjust the relevant distribution deadline accordingly.