benefit from exemptions from corporation tax on profits and gains in accordance with sections 119 and 124, and

have liabilities to tax imposed on the company and the recipients of distributions made by the company in accordance with sections 112 F1and 121 and regulations made under section 973 of ITA 2007 .

a F44UK property business (within the meaning of F45section 205 of CTA 2009), or

an overseas property business (within the meaning of F46section 206 of that Act).

business of a kind listed in Part 1 of Schedule 16 is not property rental business, and

business is not property rental business if or in so far as it gives rise to income or profits of a kind listed in Part 2 of that Schedule.

“C (pre-entry)” means the company before this Part begins to apply to it,

“C (tax-exempt)” means the company in so far as it carries on tax-exempt business (within the meaning of section 107(2)) while this Part applies to it,

“C (residual)” means the company in so far as it carries on non-tax-exempt business while this Part applies to it, and

“C (post-cessation)” means the company after this Part has ceased to apply to it.

is resident in the United Kingdom, and

is not resident in another place in accordance with the law of that place relating to taxation.

is not a close company (within the meaning of section 414 of ICTA), or

is a close company only by virtue of having as a participator (within the meaning of section 417 of ICTA) a limited partnership which is a collective investment scheme within the meaning of section 235 of the Financial Services and Markets Act 2000;

there is no more than one class of ordinary share issued by the company.

the loan creditor is not entitled to an amount by way of interest which depends to any extent on the results of all or part of the company's business or on the value of any of the company's assets,

the loan creditor is not entitled to an amount by way of interest which exceeds a reasonable commercial return on the consideration lent, and

the loan creditor is entitled on repayment to an amount which either does not exceed the consideration lent or is reasonably comparable with the amount generally repayable (in respect of an equal amount of consideration) under the terms of issue of securities listed on a recognised stock exchange.

for the interest to be reduced in the event of the results improving, or

for the interest to be increased in the event of the results deteriorating.

the company must throughout the accounting period have a property rental business in respect of which Conditions F41 and 2 below are satisfied (whether or not it also has other business), and

F5Condition 3 below must be satisfied in relation to that property rental business in respect of that accounting period.

Conditions F61 and 2 are satisfied throughout the accounting period in relation to the business, and

F7Condition 3 is satisfied in respect of the accounting period in relation to the business.

a reference to a property involved in a business is a reference to an estate, interest or right by the exploitation of which the business is conducted,

a property is a single property if it is designed, fitted or equipped for the purpose of being rented, and it is rented or available for rent, as a commercial or residential unit (separate from any other commercial or residential unit),

assets must be valued in accordance with international accounting standards (within the meaning of section 50(2) of FA 2004),

where international accounting standards offer a choice of valuation between cost basis and fair value, fair value must be used, and

no account shall be taken of liabilities secured against or otherwise relating to assets (whether generally or specifically).

by way of dividend, and

on or before the filing date for the company's tax return for the accounting period (see paragraph 14 of Schedule 18 to FA 1998).

a distribution that is withheld in order to prevent or reduce a charge to tax arising under regulations under section 114 shall be treated for the purposes of Condition 4 as having been made.

“total profits” means profits arising from tax-exempt business plus profits arising from non-tax-exempt business, and

an asset is involved in tax-exempt business if it is property involved in the relevant property rental business within the meaning given by section 107(6)(a),

assets must be valued in accordance with international accounting standards,

where international accounting standards offer a choice of valuation between cost basis and fair value, fair value must be used, and

no account shall be taken of liabilities secured against or otherwise relating to assets (whether generally or specifically).

must be given in writing to the Commissioners for Her Majesty's Revenue and Customs,

must be given before the beginning of the specified accounting period,

must be accompanied by a statement by the company that Conditions 1 to 6 in section 106 are reasonably expected to be satisfied in respect of the company throughout the specified accounting period, and

must contain such other information, and be accompanied by such other documents, as may be prescribed by regulations made by the Commissioners for Her Majesty's Revenue and Customs.

does not expect to satisfy Condition 4 of section 106 on the first day of an accounting period, by reason only that its shares have not been listed and dealt with on a recognised stock exchange within the preceding 12 months, but

reasonably expects to satisfy that Condition throughout the rest of the accounting period in reliance on section 415(1)(b) of ICTA.

subsection (2)(c) does not apply, but

the notice under subsection (1) must be accompanied by a statement by the company containing the assertions specified in subsection (5).

that Conditions 1, 2, 5 and 6 of section 106 are reasonably expected to be satisfied in respect of the company throughout the specified accounting period,

that Condition 3 of section 106 is reasonably expected to be satisfied in respect of the company for at least a part of the first day of the specified accounting period, and throughout the remainder of that period, and

that Condition 4 of section 106 is reasonably expected to be satisfied in respect of the company throughout all of the specified accounting period apart from the first day.

subsection (3) above shall not apply, and

anything done by or to C (pre-entry) before entry in relation to an asset which is deemed under subsection (2) to be sold and re-acquired shall be treated after entry as having been done by or to C (tax-exempt).

0.50% for the first instalment,

0.53% for the second instalment,

0.56% for the third instalment, and

0.60% for the fourth instalment.

notice of the election must be given to the Commissioners for Her Majesty's Revenue and Customs with the notice under section 109,

the election is irrevocable, and

if this Part ceases to apply to a company before the third anniversary of entry, any remaining instalments shall become chargeable immediately.

any business carried on by C (pre-entry),

any business carried on by C (residual), and

any business carried on by C (post-cessation)).

C (pre-entry),

C (residual), and

C (post-cessation)).

a loss incurred by C (tax-exempt) may not be set off against profits of C (residual),

a loss incurred in respect of C (residual) may not be set off against profits of C (tax-exempt),

a loss incurred in respect of C (pre-entry) may not be set off against profits of C (tax-exempt) (but this section does not prevent a loss of that kind from being set off against profits of C (residual)),

a loss incurred by C (tax-exempt) may not be set off against profits arising to C (post-cessation) (in respect of business of any kind), and

receipts accruing after entry but relating to business of C (pre-entry) shall not be treated as receipts of C (tax-exempt).

is beneficially entitled (directly or indirectly) to 10% or more of the dividends paid by the company,

is beneficially entitled (directly or indirectly) to 10% or more of the company's share capital, or

controls (directly or indirectly) 10% or more of the voting rights in the company.

cause a sum to be charged to tax, in accordance with the regulations, (whether by reference to a person's interest, to a rate of tax or otherwise);

provide that a charge does not arise, or is reduced, if the company takes or does not take action of a specified kind.

costs giving rise to debits in respect of debtor relationships of the company under F48Part 5 of CTA 2009 (loan relationships), other than debits in respect of exchange losses from such relationships (within the meaning of F48section 475 of that Act),

any exchange gain or loss from a debtor relationship within the meaning of F49that Part in relation to debt finance,

any credit or debit falling to be brought into account F50in accordance with Part 7 of CTA 2009 (derivative contracts) in relation to debt finance,

the financing cost implicit in a payment under a finance lease, and

any other costs arising from what would be considered, in accordance with generally accepted accounting practice, to be a financing transaction.

provide for this Part to cease to apply to a company at a time specified by or determined in accordance with the regulations (which may be before the breach of a requirement);

provide for this Part to continue to apply to a company with specified modifications;

provide for sums to be charged to tax, or otherwise treated, in accordance with the regulations;

make provision under paragraph (c) either by specifying a sum that arises in relation to a company or by providing for a sum to be treated as arising in relation to a company;

make provision by reference to the extent of a failure to satisfy a requirement;

make provision by reference to the number of requirements not satisfied;

limit the number of occasions on which a provision of the regulations may be relied upon by a company in respect of a specified period;

include other provision for preventing tax avoidance;

confer a discretion on the Commissioners.

after the commencement of the regulations, or

in the calendar year during which the regulations are made.

the Commissioners may (in addition to the adjustment under paragraph (a)) assess the company to such additional amount of corporation tax F53... as they think is equivalent to the value of the tax advantage.

to create or inflate or apply a loss, deduction or expense (whether or not suffered or incurred by the company), or

to have another effect of a kind specified for the purposes of this subsection by regulations made by the Treasury.

quash the notice,

affirm the notice, or

vary the notice.

disposes of an asset used wholly and exclusively for the purposes of tax-exempt business, and

holds the proceeds in cash.

shall be disregarded for the purposes of section 120, and

shall be treated for all tax purposes as arising from a loan relationship entered into in connection with business of C (residual).

the proceeds shall, during the period of 24 months beginning with the date of the disposal, be treated for the purposes of Condition 2 as assets held in connection with the tax-exempt business, but

any income derived from the proceeds is income from non-tax-exempt business.

held on deposit (whether or not in sterling),

invested in stocks or bonds of any of the descriptions included in Part 1 of Schedule 11 to FA 1942 (gilts), or

held or invested in such other form as the Commissioners for Her Majesty's Revenue and Customs may specify for the purposes of this section in regulations.

a loan relationship if or in so far as it relates to tax-exempt business,

a hedging derivative contract if or in so far as it relates to tax-exempt business, or

embedded derivatives if or in so far as the host contract is entered into for the purposes of tax-exempt business.

a derivative contract is hedging in relation to a company if or in so far as it is acquired as a hedge of risk in relation to F22an asset by the exploitation of which tax-exempt business is conducted,

a derivative contract is hedging in relation to a company if or in so far as it is acquired as a hedge of risk in relation to a liability incurred in connection with tax-exempt business,

a designation of a contract as wholly or partly hedging for the purposes of a company's accounts shall be conclusive, and

“embedded derivatives” is to be read in accordance with section 584 or 586 (as the case may be) of CTA 2009, and

the value of an asset, and

profits attributable to it.

in the case of a shareholder within the charge to corporation tax, as profits of a F64UK property business (within the meaning of section 205 of CTA 2009), and

in the case of a shareholder within the charge to income tax, as the profits of a UK property business (within the meaning of section 264 of ITTOIA 2005).

if the shareholder is a company within the charge to corporation tax, shall be chargeable to tax as profits of a F65UK property business (within the meaning of section 205 of CTA 2009),

if the shareholder is a person other than a company within the charge to corporation tax, shall be chargeable to tax as profits of a UK property business (within the meaning of section 264 of ITTOIA 2005), and

in either case, shall not be F25non-resident landlord income for the purposes of regulations under section 971 of ITA 2007 (income tax due in respect of income of non-resident landlords).

is a F66 person who is charged to tax under Part 3 of CTA 2009 (trading income) in respect of distributions made by companies that are received in the course of a trade not consisting of insurance business,

is a dealer in securities who is charged to tax under Part 2 of ITTOIA 2005 (trading income) in respect of distributions made by companies,

any other F68UK property business (within the meaning of section 205 of CTA 2009) carried on by the shareholder,

any other UK property business (within the meaning of section 264 of ITTOIA 2005) carried on by the shareholder,

any overseas property business (within the meaning of F69section 206 of CTA 2009) carried on by the shareholder, and

any overseas property business (within the meaning of section 265 of ITTOIA 2005) carried on by the shareholder.

the reference to a company to which this Part applies includes a reference to C (post-cessation), and

“profits” includes gains.

the asset was used wholly and exclusively for the purposes of the business of C (tax-exempt), or

the asset was used partly for the purposes of the business of C (tax-exempt) and partly for the purposes of the business of C (residual) during one or more periods of (in aggregate) less than a year, but was otherwise used wholly and exclusively for the purposes of the business of C (tax-exempt).

disposed of by C (tax-exempt), and

immediately re-acquired by C (residual).

subsection (3) above shall not apply, and

anything done by or to C (tax-exempt) before the deemed sale and re-acquisition shall be treated after the deemed sale and re-acquisition as having been done by or to C (residual).

the deemed sale and re-acquisition under section 111(2) shall be disregarded, and

the asset shall be treated as having been disposed of in the course of the business of C (residual).

a property acquired by a company to which this Part applies has been developed since acquisition,

the cost of the development exceeds 30% of the fair value of the property (determined in accordance with international accounting standards) at entry or at acquisition, whichever is the later, and

the company disposes of the property within the period of three years beginning with the completion of the development.

disposed of by C (residual), and

immediately re-acquired by C (tax-exempt).

subsection (3) above shall not apply, and

anything done by or to C (residual) before the deemed sale and re-acquisition shall be treated after the deemed sale and re-acquisition as having been done by or to C (tax-exempt).

C (tax-exempt) disposes of an asset to a 75% subsidiary (“S”) of C (residual),

C (residual) disposes of its interest in S to another company (“P”),

on the date when it acquires the interest in S, P gives a notice under section 109 (as modified by paragraph 8 of Schedule 17) which specifies an accounting period which begins within the period of six months beginning with the date of the disposal of the asset, and

this Part begins to apply to the group of which S is a member from the beginning of the specified accounting period.

sections 111 and 112 shall not apply to the group of which S is a member in relation to the asset disposed of by C (tax-exempt) or in relation to business conducted by the exploitation of that asset, and

section 125 shall not apply to the disposal of the asset by C (tax-exempt).

the company has relied on a provision of regulations under section 116 on a specified number of occasions in a specified period,

the company has been given a specified number of notices under section 117 in a specified period, or

the Commissioners think that a breach of a requirement in section 107 or 108, or an attempt by the company to obtain a tax advantage, is so serious that this Part should cease to apply to it.

subsection (3) above shall not apply, and

anything done by or to C (tax-exempt) before cessation in relation to an asset which is deemed to be sold and re-acquired shall be treated after cessation as having been done by or to C (post-cessation).

ceases to apply to a company by reason of section 128, and

had applied to the company for a continuous period immediately before cessation of less than ten years.

any deemed disposal under section 111(2) that resulted in a gain,

any deemed disposal under section 131(3), or

any deemed disposal under section 125(2).

“tax-exempt asset” means an asset that was involved (within the meaning of section 107(6)(a)) in the business of C (tax-exempt), and

“the post-cessation period” means the period of two years beginning with the date of cessation.

ceases to apply to a company by reason of section 129 or 130, and

had applied to the company for a continuous period immediately before cessation of less than ten years.

that a provision of this Part shall have effect in relation to the company with a specified modification, or

that a provision of an enactment relating to corporation tax shall apply, not apply or apply with modifications in relation to the company.

alter the time at which this Part is taken to cease to apply to the company in accordance with section 129 or 130;

disapply or alter the effect of section 119(1) or 124(1)).

quash the direction,

affirm the direction, or

vary the direction.

a company (other than the principal company) which is not an effective 51% subsidiary of the principal company,

an insurance company,

an insurance subsidiary, or

an open-ended investment company.

“effective 51% subsidiary” has the meaning given by section 170 of TCGA 1992 (groups of companies),

“75% subsidiary” has the meaning given by section 838 of ICTA (subsidiaries),

F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“insurance subsidiary” means a company in which 75% or more of the ordinary shares are held by one or more insurance companies.

G (pre-entry),

G (residual), and

G (post-cessation)).

sections 171 and 171A of TCGA 1992 (actual or notional transfer of assets within group),

sections 179A and 179B of TCGA 1992 (reallocation or roll-over of gain within a group),

Chapter 4 of Part X of ICTA (corporation tax: group relief),

Chapters 4 and 6 to 8 of Part 5 of CTA 2009 (loan relationships),

Part 7 of that Act (derivative contracts), and

Part 8 of that Act (intangible fixed assets).

jointly by a company to which this Part applies and another person, or

by a person in which a company to which this Part applies has an interest.

by virtue of this section, or

in relation to a company to which this Part applies where the company also carries on business in relation to which this Part applies by virtue of this section.

a company to which this Part applies having a minimum percentage interest of a specified kind in the joint venture;

an election by a company to which this Part applies.