Corporation Tax Act 2010 section 596

Member of joint venture group liable for additional charge

Section 596 sets out when a member of a joint venture group becomes liable to an additional entry charge where a venturing company or venturing group increases its shareholding so that the joint venture group member effectively joins the venturing group's UK REIT.

• Where a venturing company increases its holding in a member of a joint venture group such that it becomes the principal company of a group, that member is chargeable to tax on the "reduced notional amount".
• Where a venturing group increases its holding in a member of a joint venture group to at least 75%, causing the member to join the venturing group, an additional entry charge also arises on the "reduced notional amount".
• The 75% threshold can be met by combining indirect and smaller shareholdings held by different members of the venturing group, rather than requiring a single member to hold 75%.
• The "reduced notional amount" is a specifically defined figure that determines the quantum of the additional entry charge payable under section 538.