Corporation Tax Act 2010

553 Meaning of “holder of excessive rights” [F1 and “excluded holder”] U.K.

(1) For the purposes of section 551 “holder of excessive rights” means a person who meets—

(a) condition A, and

(b) either condition B or C.

F2 ...

(2) Condition A is that the person—

(a) is beneficially entitled (directly or indirectly) to at least 10% of the [F3 distributions] paid by the distributor,

(b) is beneficially entitled (directly or indirectly) to at least 10% of the distributor's share capital, or

(c) controls (directly or indirectly) at least 10% of the voting rights in the distributor.

(3) Condition B is that the person is a company.

(4) Condition C is that—

(a) the person is treated as a body corporate for tax purposes—

(i) in accordance with the law of a territory outside the United Kingdom with which arrangements have been entered into to provide relief from double taxation, or

(ii) in accordance with an international agreement containing such arrangements, and

(b) those arrangements have effect by virtue of an Order in Council under section 2 of TIOPA 2010.

[F4 (4A) For the purposes of section 551, a holder of excessive rights is an “excluded holder” if—

(a) in accordance with double taxation arrangements (within the meaning of section 2(4) of TIOPA 2010), the holder is taxed at a particular rate, or not taxed at all, on distributions from a UK REIT, unless the sole reason for that treatment is the size of the holder’s interest in the UK REIT, or

(b) the holder is a person to whom a payment of a distribution must be made without deduction of income tax in accordance with regulation 7 of the Real Estate Investment Trusts (Assessment and Recovery of Tax) Regulations 2006 (S.I. 2006/2867) (gross payment of distributions).]

(5) In subsection (2) “the distributor” has the meaning given by section 551(2).

Textual Amendments

F1 Words in s. 553 heading inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 7 para. 10(2)(a)

F2 Words in s. 553(1) omitted (22.2.2024) by virtue of Finance Act 2024 (c. 3), Sch. 7 para. 10(2)(b)

F3 Word in s. 553(2)(a) substituted (with effect in accordance with Sch. 4 para. 12 of the amending Act) by Finance (No. 3) Act 2010 (c. 33), Sch. 4 para. 7

F4 S. 553(4A) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 7 para. 10(2)(c)