(1)Subsection (2) applies if—
(a)an asset has been used wholly and exclusively for the purposes of property rental business of a company which is, or is a member of, a UK REIT, F1...
(b)the asset is disposed of in the course of trade for the purposes of residual business of the company[F2, and
(c)if the company is a member of a UK REIT, the disposal is not to another member of the UK REIT.]
(2)If this subsection applies—
(a)the deemed sale and reacquisition under section 536(2) is to be ignored, and
(b)the asset is to be treated as having been disposed of in the course of the company's residual business.
(3)Subsection (2) is to be taken to apply in particular if—
(a)a property acquired by a company which is, or is a member of, a UK REIT has been developed since acquisition,
(b)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 later, F3...
(c)the company disposes of the property within the period of 3 years beginning with the completion of the development[F4, and
(d)if the company is a member of a UK REIT, the disposal is not to another member of the UK REIT.]
F5(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)If a percentage of the gains 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 gains is to be treated for corporation tax purposes as gains of the member's residual business.
(6)This section has effect in relation to a non-UK member of a group UK REIT as if references to property rental business were references to UK property rental business.
(7)Section 535 is relevant to the tax treatment of any gain arising to a company under this section.
Textual Amendments
F1Word in s. 556(1) omitted (with effect in accordance with Sch. 4 para. 44 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 4 para. 43(2)(a)
F2S. 556(1)(c) and preceding word inserted (with effect in accordance with Sch. 4 para. 44 of the amending Act) by Finance Act 2012 (c. 14), Sch. 4 para. 43(2)(b)
F3Word in s. 556(3) omitted (with effect in accordance with Sch. 4 para. 44 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 4 para. 43(3)(a)
F4S. 556(3)(d) and preceding word inserted (with effect in accordance with Sch. 4 para. 44 of the amending Act) by Finance Act 2012 (c. 14), Sch. 4 para. 43(3)(b)
F5S. 556(4) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 4 para. 35(1) (with Sch. 4 para. 35(2))