Finance (No. 2) Act 2023

Amendment of the Real Estate Investment Trusts (Assessment and Recovery of Tax) Regulations 2006 U.K.

6 (1) The Real Estate Investment Trusts (Assessment and Recovery of Tax) Regulations 2006 (S.I. 2006/2867) are amended as follows.

(2) After regulation 7 insert—

“7A Partial gross payment of distributions to partnerships

(1) This regulation applies to the payment of a relevant distribution by a company if—

(a) the company reasonably believes that the recipient is a partnership whose partners include a person or body—

(i) to which paragraph (2) or (3) of regulation 7 applies, or

(ii) to which paragraph (4) of that regulation applies where the partner’s share of the partnership profits are to be applied for the purposes of the fund, scheme, account or plan in respect of which that partner has duties,

(b) the company has a reasonable belief as to the share of partnership profits that each partner is entitled to,

(c) the company reasonably believes that arrangements exist that will result in each partner’s share of the partnership profits reflecting whether or not tax was deducted in relation to that partner (as a result of regulation 3(2) and this regulation), and

(d) the company elects to make the payment in accordance with paragraph (2) (by making it in accordance with that paragraph).

(2) The relevant proportion of the relevant distribution is to be paid without deduction of income tax.

(3) The relevant proportion is equal to the sum of the shares of the partnership profits (expressed as proportions) to which each partner who falls within paragraph (1)(a)(i) or (ii) is entitled.

(4) But—

(a) paragraph (2) is subject to the qualification in paragraph (7) of regulation 7, and

(b) if the company’s belief as to any of the matters referred to in paragraph (1) is incorrect, these Regulations apply to the payment as if it were never one to which this regulation applied.

(5) Upon discovering that a payment that was made in accordance with paragraph (2) should not have been made in accordance with that paragraph (as a result of paragraph (4) or otherwise), the company who made it must deliver an amended return in accordance with regulation 11.

(6) Where this paragraph applies to the payment of a relevant distribution, the company making it must (in addition to its duty under regulation 6(1)) furnish the partnership with a statement in writing in respect of each partner that is not a partner who falls within paragraph (1)(a)(i) or (ii) showing the amount of tax deducted in relation to each such partner.

(7) The duty imposed by paragraph (6) is enforceable at the suit or instance of the partnership.”

(3) In regulation 3(2) (deduction of tax), after “regulation 7” insert “or 7A”.