Corporation Tax Act 2010 section 567

Meaning of "the notional amount"

Section 567 explains how to calculate "the notional amount", a figure used when testing whether a group real estate investment trust (REIT) meets the balance of business conditions relating to property rental income and assets.

• The notional amount represents a hypothetical figure used to assess a group REIT's compliance with the balance of business conditions set out in the preceding section.
• It is calculated by reference to the aggregate market value of assets involved in the UK property rental business carried on by group members, excluding assets attributable to any ownership percentage held by a non-member of the group.
• This calculation mirrors the approach used elsewhere in the REIT rules to ensure that only genuine group interests in property rental assets are taken into account.
• The notional amount feeds directly into the tests under section 566, which determine whether the group's property rental business is sufficiently dominant relative to its other activities.