558Demergers: disposal of asset
(1)This section applies in the case of a company UK REIT if—
(a)the company (“C”) disposes of an asset involved in its property rental business to a 75% subsidiary (“S”) of C,
(b)C (so far as it carries on residual business) disposes of its interest in S to another company (“P”),
(c)on the date when P acquires the interest in S, P gives a notice under section 523 specifying a date that falls within the post-disposal period, and
(d)the group of which S is a member becomes a group UK REIT from the specified date.
(2)“The post-disposal period” means the period of 6 months beginning with the date of the disposal of the asset by C.
(3)P may give a notice under section 523 in accordance with subsection (1)(c) even if it does not expect to meet conditions C to F in section 528 throughout accounting period 1.
(4)Sections 536 and 537 (effects of entry) and section 538 (entry charge) do not apply to the group of which S is a member—
(a)in relation to the asset disposed of by C, or
(b)in relation to business conducted by the exploitation of that asset.
(5)Sections 555 and 556 (movement of assets out of ring fence) do not apply to the disposal of the asset by C.
(6)But if, at the end of the post-disposal period, conditions C to F in section 528 are not met in relation to P, subsections (4) and (5) are to be treated as not having had effect.