The Real Estate Investment Trusts (Joint Ventures) Regulations 2006

Requirements for venturing companies

6.—(1) A venturing company must include the proportion of the profits of the joint venture company to which it is beneficially entitled within the amount of the profits of its property rental business for the purposes of determining whether Condition 4 in section 107(8) is satisfied.

(2) A venturing company must include the proportion of profits of the joint venture company to which it is beneficially entitled within the amount of profits arising from tax-exempt business for the purposes of determining whether the venturing company has satisfied Condition 1 in section 108(2).

(3) A venturing company must include the percentage of assets to which it is beneficially entitled within the valuation of the assets involved in tax-exempt business for the purposes of calculating whether the venturing company has satisfied Condition 2 in section 108(3).

(4) Section 115 and the regulations made under it shall apply as if for subsection (2) there were substituted—

“(2) That sum is—

where—

(a)

Profits means the aggregate of—

(i)

the profits of the tax-exempt business of the company before the off-set of capital allowances;

(ii)

the financing costs of the company’s property rental business as claimed for tax purposes;

(b)

Financing Costs (JV) means the aggregate of—

(i)

the company’s share of the profits of the property rental business of the joint venture company before the set-off of capital allowances, and

(ii)

the company’s share of the financing costs of the joint venture company’s property rental business as claimed for tax purposes;

(c)

Financing Costs (external) means the sum of the financing costs of C (tax-exempt) and the venturing company’s proportion of the financing costs of the UK property rental business of the joint venture company but disregarding in both cases financing costs owed by the venturing company to the joint venture company and vice versa.”.