Corporation Tax Act 2010

530 Condition as to distribution of profits U.K.

(1) In the case of a group UK REIT, the condition in this section is met in relation to an accounting period if at least 90% of the group's UK profits arising in the period are distributed—

(a) by the principal company of the group,

F1 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

(2) In subsection (1) “UK profits” means the sum of the profits of members of the group as shown in the financial statement under section 532(2)(b) (group's property rental business in UK).

(3) Subsection (1) is to be ignored so far as—

(a) the condition applies to profits of the property rental business attributable to a member of the group, and

(b) compliance with the condition by the member would (if the condition applied to it) be unlawful as a result of a relevant enactment.

(4) In the case of a company UK REIT, the condition in this section is met in relation to an accounting period if at least 90% of the profits of the company's property rental business arising in the period are distributed—

F2 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) 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).

For the purposes of this subsection profits are to be calculated in accordance with section 599.

(5) Subsection (4) is to be ignored so far as compliance with the condition would be unlawful as a result of a relevant enactment.

(6) A distribution that is withheld in order to prevent or reduce a charge to tax arising under section 551 (distribution to holder of excessive rights) is to be treated for the purposes of this section as having been made.

[F3 (6A) In this section, references (however expressed) to a distribution are to either or both of the following—

(a) a dividend in cash, and

(b) share capital issued in lieu of a cash dividend.

(6B) Section 1051(2) to (4) (meaning of “share capital issued in lieu of a cash dividend”) applies for the purposes of subsection (6A) as it applies for the purposes of section 1049(1)(a).

(6C) Subsection (6D) applies if—

(a) (apart from that subsection) there would be a a failure to meet the condition in this section in relation to an accounting period, and

(b) that failure would arise solely by reason of the operation, by virtue of section 599A(2), of section 412(2) of ITTOIA 2005 (substitution of market value) in relation to any distributions within subsection (6A)(b).

(6D) Subsection (1) or (4) (as the case may be) is to have effect in relation to that accounting period as if for the words “on or before” there were substituted “before the end of the period of [F4 6] months beginning with”.]

(7) In this section “relevant enactment” means—

(a) an enactment (including Northern Ireland legislation and an Act of the Scottish Parliament), or

(b) an enactment of a jurisdiction outside the United Kingdom if the enactment is prescribed, or is of a kind prescribed, for the purposes of this paragraph in regulations made by the Commissioners for Her Majesty's Revenue and Customs.

Textual Amendments

F1 S. 530(1)(b) omitted (with effect in accordance with Sch. 4 para. 12 of the amending Act) by virtue of Finance (No. 3) Act 2010 (c. 33), Sch. 4 para. 4(2)

F2 S. 530(4)(a) omitted (with effect in accordance with Sch. 4 para. 12 of the amending Act) by virtue of Finance (No. 3) Act 2010 (c. 33), Sch. 4 para. 4(3)

F3 S. 530(6A)-(6D) inserted (with effect in accordance with Sch. 4 para. 12 of the amending Act) by Finance (No. 3) Act 2010 (c. 33), Sch. 4 para. 4(4)

F4 Word in s. 530(6D) substituted (with effect in accordance with Sch. 4 para. 26(1) of the amending Act) by Finance Act 2012 (c. 14), Sch. 4 para. 22