Corporation Tax Act 2010

541 Ring-fencing of property rental business U.K.

(1) This section applies—

(a) in the case of a group UK REIT, to the group and to each company which is a member of the group, and

(b) to a company UK REIT.

(2) For corporation tax purposes property rental business of the group or company is treated as a separate business, distinct from—

(a) business of the pre-entry group or pre-entry company,

(b) residual business of the group or company, and

(c) business of the post-cessation group or post-cessation company.

(3) For corporation tax purposes the group or company is treated as a separate group or company so far as it carries on property rental business, distinct from—

(a) the pre-entry group or pre-entry company,

(b) the group or company so far as it carries on residual business, and

(c) the post-cessation group or post-cessation company.

(4) In particular—

(a) a loss made in property rental business may not be set off against profits of residual business,

(b) a loss made in residual business may not be set off against profits of property rental business,

(c) a loss made in business carried on before entry may not be set off against profits of property rental business,

(d) a loss made in property rental business may not be set off against profits of business carried on after cessation (in respect of business of any kind), and

(e) receipts accruing after entry but relating to business carried on before entry are not treated as receipts of property rental business.

(5) Nothing in this section prevents a loss made in business carried on before entry from being set off against profits of residual business.

(6) In subsections (4) and (5) references to a loss include references to a deficit, expense, charge or allowance.

(7) 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 those profits is to be treated for the purposes of this section as profits of the member's residual business.

(8) This section has effect in relation to a non-UK member of a group, as if references to property rental business were references to UK property rental business.

(9) For the meaning of “cessation”, see section 607(2).