Corporation Tax Act 2010 section 575

Notice under section 572: breach of conditions as to property rental business

Section 575 sets out the circumstances in which HMRC may terminate a company's UK REIT status by issuing a notice under section 572, where there have been breaches of the property rental business conditions.

• HMRC may issue a termination notice if the property rental business condition is breached in three consecutive accounting periods.
• HMRC may also issue a termination notice if, within a rolling ten-year period, the company has relied on the grace provision in section 563(2) more than twice for any one of conditions A, B, or C in section 529.
• Where a breach of condition B is an unavoidable consequence of a breach of condition A in the same accounting period, the condition B breach is ignored when counting reliance on the grace provision.
• Where a single breach spans more than one accounting period but no more than two, it counts as only one instance of relying on the grace provision.