Corporation Tax Act 2010

Expand All Explanatory Notes (ENs)

540 Election to treat notional income as arising in instalments

(1) A company may elect to have the amount of notional income mentioned in section 538(1) treated as arising in 4 instalments, the first on the date of entry and the other 3 on the first three anniversaries of that date.

(2) For this purpose section 539(2) has effect as if the percentage referred to were—

(a) 0.50% for the first instalment,

(b) 0.53% for the second instalment,

(c) 0.56% for the third instalment, and

(d) 0.60% for the fourth instalment.

(3) If a company makes an election under subsection (1)—

(a) notice of the election must be given to an officer of Revenue and Customs with the notice under section 523 or 524 (as the case may be), and

(b) the election cannot be revoked.

(4) Subsection (5) applies if—

(a) a company makes an election under subsection (1), and

(b) before the third anniversary of entry, the company ceases to be, or to be a member of, a UK REIT.

(5) Any remaining instalments become chargeable immediately.

(6) The Treasury may by regulations amend a percentage specified in subsection (2) in order to reflect a change in interest rates; but any such regulations are not to have effect in relation to elections made before the regulations come into force.