Corporation Tax Act 2010 section 586

Notice for Part to apply: joint venture company

Section 586 allows a UK REIT (whether a group or a single company) to elect for the REIT rules to apply to the property rental business of a joint venture company, provided the REIT holds at least a 40% economic interest in that joint venture.

• A group UK REIT or a company UK REIT may give notice to HMRC to bring a joint venture company's property rental business within the REIT regime, but only if the 40% ownership tests are satisfied
• The 40% tests require that the REIT (or, for a group, its members collectively) is beneficially entitled to at least 40% of the joint venture's distributable profits and at least 40% of its assets available to equity holders on a winding up
• The notice must identify the joint venture company, be given with that company's consent, specify the date from which the REIT rules are to apply, and be submitted in writing to an officer of HMRC before that date
• The notice may be given at the same time as the initial notice to become a UK REIT, or at any later time while the group or company remains a UK REIT