Corporation Tax Act 2010

566 Breach of condition B in section 531 in accounting period 1

(1) Subsection (2) applies if condition B in section 531 (balance of business: assets involved in property rental business)—

(a) is not met in relation to accounting period 1, but

(b) is met at the beginning of the next accounting period.

(2) The breach is to be ignored; but an amount of income calculated in accordance with section 567 (“the notional amount”) is charged to corporation tax under the charge to corporation tax on income.

(3) The notional amount is to be treated as profits of residual business—

(a) in the case of a group UK REIT, of the principal company of the group, and

(b) in the case of a company UK REIT, of the company.

(4) It is treated as arising at the end of accounting period 1.

(5) Accordingly it is charged to corporation tax at the rate mentioned in section 534(3) (rate at which profits of residual business are charged).

(6) No loss, deficit, expense or allowance may be set off against the notional amount or against tax charged under this section.