Corporation Tax Act 2010

529 Conditions as to property rental business

(1) Condition A is that the property rental business involves at least 3 properties.

(2) Condition B is that no single property represents more than 40% of the total value of the properties involved in the property rental business.

(3) For the purposes of conditions A and B the property rental businesses of the members of a group are to be treated as a single business.

(4) For the purposes of conditions A and B—

(a) 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,

(b) 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),

(c) assets must be valued in accordance with international accounting standards,

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

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

(5) If a percentage of the profits of property rental business of a member of a group UK REIT is excluded from a financial statement in accordance with section 533(3), that percentage of the member’s property rental business is to be ignored for the purposes of subsection (2).