188体育

1. Real estate investment trusts

(1) Schedule 7 makes amendments to the corporation tax regime for real estate investment trusts.

SCHEDULE 1

REAL ESTATE INVESTMENT TRUSTS

Amendment of CTA 2010

1. CTA 2010 is amended in accordance with paragraphs 2 to 6.

Certain institutional investors required to be widely held

2. (1) Section 528 is amended as follows.

(2) In subsection (4)鈥�

a) in the words before paragraph (a), after 鈥渃ompany鈥� insert 鈥渕eets the non-close condition.鈥�, and
b) omit paragraphs (a) and (b).

(3) In subsection (4A)鈥�

(a) in paragraph (a)鈥�

(i) in sub-paragraph (i), after 鈥�2000)鈥� insert 鈥渢hat meets the genuine diversity of ownership condition (see section 528ZB(2)) or the non-close condition鈥�, and
(ii) in sub-paragraph (ii), after 鈥淎ct)鈥� insert 鈥渁nd that meets the genuine diversity of ownership condition or the non-close condition鈥�,

(b) in paragraph (b)鈥�

(i) in sub-paragraph (i), after 鈥淎ct鈥� insert 鈥渁nd that meets the genuine diversity of ownership condition or the non-close condition鈥�,
(ii) in sub-paragraph (ii), for 鈥渁nd鈥� substitute 鈥渢hat鈥�, and
(iii) in that sub-paragraph, after 鈥�2000)鈥� insert 鈥渁nd that meets the genuine diversity of ownership condition or the non-close condition鈥�,

(c) in paragraph (c), after 鈥�2000)鈥� insert 鈥渢hat meets the genuine diversity of ownership condition or the non-close condition鈥�, and
(d) in paragraph (e), after 鈥渨ho鈥� insert 鈥渕eets the non-close condition and who鈥�.

(4) After subsection (4B) insert鈥�

鈥�(4C) The non-close condition is met鈥�

(a) in relation to a company, if鈥�

(i) it is not a close company, or
(ii) it is a close company but only because it has an institutional investor as a direct or indirect participator, and

(b) in relation to a person or scheme other than a company, if it would fall within paragraph (a)(i) or (ii) if鈥�

(i) the person鈥檚 business or the scheme were a company, and
(ii) the interests of persons in the business or scheme were shares in the company.鈥�

(5) In subsection (5), for 鈥渟ubsection (4)(a)鈥� substitute 鈥渟ubsection (4C)(a)(i)鈥�.

(6) After that subsection insert鈥�

鈥�(5A) For the purposes of subsection (4C)(a)(ii)鈥�

(a) a person is a 鈥渄irect participator鈥� if the person is a participator for the purposes of Part 10 of CTA 2010 (see section 454), and
(b) a person is an 鈥渋ndirect鈥� participator in a company if the person has a share or interest in the capital or income of the company through another body corporate or other bodies corporate.

(5B) For the purposes of subsection (5A)(b)鈥�

(a) reference to having a share or interest in the capital or income of a company through a body corporate is to be read in accordance with sub-paragraphs (9) and (10) of paragraph 46 of Schedule 5AAA to TCGA 1992 (meaning of direct or indirect participator), and
(b) a person is regarded for the purposes of that subsection and those sub-paragraphs as having a share or interest in the capital or income of a company if the person would be a participator in the company as a result of section 454(2) of CTA 2010.

(5C) In determining whether a company is a close company for the purposes of the non-close condition鈥�

(a) the rights and powers of a person (鈥淎鈥�) are not to be attributed to another person (鈥淧鈥�) merely because A is a partner of P for the purposes of any attribution under section 451(4) (rights of a person鈥檚 associates to be attributed to the person etc in determining 鈥渃ontrol鈥�) , and
(b) a company (鈥淐鈥�) is not to be regarded as a close company only because a person possesses or is entitled to acquire the greater part of the voting power in C as a result of being a general partner in a limited partnership which is a collective investment scheme.鈥�

(7) In consequence of the other amendments made by this paragraph, in Schedule 5AAA to TCGA 1992, in paragraph 46(3)(a), for 鈥渟ection 528(4A)(a), (b), (c), (i) or (j)鈥� substitute 鈥渟ection 528(4A)(i) or (j)鈥�.

(8) Sub-paragraph (9) applies where鈥�

(a) immediately before the amendments made by sub-paragraphs (3) come into force, a company met the conditions in section 528 of CTA 2010, and
(b) the company would (ignoring sub-paragraph (9)) cease to meet those conditions only as a result of one or more persons ceasing to be regarded as institutional investors as a result of the making of those amendments.

(9) Such a person is to be treated as an institutional investor for the purposes of determining whether the company meets those conditions for so long as the person鈥檚 interest in the company 鈥�

(a) does not increase, and
(b) remains relevant to the question of whether those conditions are met.

(10) The amendments made by sub-paragraphs (2) and (4) are to be treated as having always had effect.

Insurance companies may be included in group UK REIT

3. (1) Section 606 (meaning of group) is amended as follows.

(2) In subsection (2), omit paragraphs (b) and (c) (but not the 鈥渙r鈥� at the end of paragraph (c)).

(3) In subsection (5), omit the definitions of 鈥渋nsurance company鈥� and 鈥渋nsurance subsidiary鈥�.

Property financing costs

4. (1) Section 544 (meaning of 鈥減roperty profits鈥� and 鈥減roperty financing costs鈥�) is amended as follows.

(2) In subsection (3)(a), for 鈥減roperty rental business of members of the group substitute 鈥渢he group鈥檚 property rental business in the United Kingdom鈥�.

(3) After subsection (3) insert鈥�

鈥�(3A) The reference in subsection (3)(a) to the group鈥檚 property rental business in the United Kingdom is a reference to鈥�

(a) property rental business of UK members of the group, and (b) UK property rental business of other members.鈥�

(4) Section 544 has effect, and is to be deemed always to have had effect, with the amendments made by sub-paragraphs (2) and (3).

(5) After subsection (4) insert鈥�

鈥�(4A) But property financing costs do not (for the purposes of section 543) include any expense for which a deduction would be not be allowed in calculating profits in accordance with section 599, other than an expense which is disallowed only as a result of the application of Part 10 of TIOPA 2010 (corporate interest restriction).鈥�

(6) The amendment made by sub-paragraph (4) has effect for accounting periods ending on or after 1 April 2023.

Single property rule

5. In section 529 (conditions as to property rental business), in subsection (2B), for paragraph (a) substitute鈥�

鈥�(a) where the group or company is a UK REIT, the later of鈥�

(i) where its property rental business previously met conditions A and B, the day after the last day on which it met both of those conditions, and
(ii) where its property rental business previously met condition C in relation to a property other than the property it now seeks to rely on to meet that condition, the day after the last day on which it met that condition in relation to that other property, or鈥�.

Disposal of rights or interests in UK property rich funds

6. (1) Section 535A (disposals of rights or interests in UK property rich companies) is amended as follows.

(2) After subsection (7) insert鈥�

鈥�(7A) Any such reference also includes the disposal of a right or interest in a fund (a 鈥渞elevant fund鈥�) that鈥�

(a) is an authorised contractual scheme (within the meaning given by section 237(3) of FISMA 2000) which is a co-ownership scheme (within the meaning given by section 235A of that Act), and
(b) is UK property rich as determined in accordance with paragraph 3 of Schedule 5AAA to TCGA (UK property rich collective investment vehicles etc).鈥�

(3) In subsection (8) after 鈥渟ubsection (7)鈥� insert 鈥渙r (7A)鈥�.

Corporate interest restriction and disposal of interests in UK property rich companies

7. (1) Section 452 of TIOPA 2010 (corporate interest restriction:REITs) is amended as follows

(2) In subsection (1)(b), after 鈥�(5)鈥� insert 鈥�, or section 535A(2),鈥�.

(3) In subsection (4)(b), after 鈥�(5)鈥� insert 鈥�, or section 535A(2),鈥�