What does section 570 of the Corporation Tax Act 2010 cover?

Section 570 provides an introductory overview of how a group or company ceases to be a UK Real Estate Investment Trust (REIT). It signposts the detailed provisions that follow in the chapter, covering voluntary termination, HMRC-initiated termination, automatic loss of status, and the corporation tax consequences of leaving the UK REIT regime.

What are the three ways UK REIT status can come to an end?

UK REIT status can end in three ways: first, voluntarily by the principal company or company giving notice to HMRC; second, by an HMRC officer issuing a termination notice in specified circumstances such as obtaining a tax advantage or multiple condition breaches; third, automatically where certain fundamental qualifying conditions are breached.

In what circumstances can HMRC terminate UK REIT status?

HMRC can terminate UK REIT status by issuing a notice only in specific circumstances. These include situations where the REIT has obtained a tax advantage, where conditions relating to the structure or operation of the REIT have been breached, or where there have been multiple breaches of the qualifying conditions required to maintain UK REIT status.

What are the consequences of ceasing to be a UK REIT?

When a group or company ceases to be a UK REIT, corporation tax consequences arise regardless of whether the cessation was voluntary, initiated by HMRC, or automatic. These include specific corporation tax charges and provisions dealing with early exit from the regime, which may result in additional tax liabilities for the group or company.

Corporation Tax Act 2010 section 570

Overview of Chapter

Section 570 provides an overview of how, and in what circumstances, a group or company ceases to be a UK Real Estate Investment Trust (REIT).

UK REIT status can be ended voluntarily by the principal company of a group, or by the company itself, giving notice to HMRC.
HMRC can terminate UK REIT status by issuing a notice in certain specified circumstances, such as obtaining a tax advantage or multiple breaches of conditions.
In some situations, UK REIT status is lost automatically — for example, where certain fundamental conditions are breached.
There are specific corporation tax and other consequences that follow when a group or company ceases to be a UK REIT, including provisions relating to early exit.

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