Part 12Real Estate Investment Trusts
Chapter 10Joint ventures
Additional entry charge due in some cases
596Member of joint venture group liable for additional charge
1
A member of a joint venture group (“MJVG”) is chargeable to tax under section 538 (entry charge) if, after the giving of a notice under section 587(2) in respect of the group, condition A or B is met.
2
Condition A is that—
a
the company that gave the notice under section 587(2) becomes the principal company of a group UK REIT,
b
it gives a notice under section 587(1) in respect of the joint venture group, and
c
its shareholding in MJVG has increased (but not to 75% or more) between the giving of the two notices.
3
Condition B is that the company that gave the notice under section 587(2)—
a
increases its shareholding in MJVG to at least 75%, and
b
gives a notice under section 523 (such that MJVG becomes a member of the new group UK REIT resulting from the notice).
4
A member of a joint venture group (“MJVG”) is chargeable to tax under section 538 if a venturing group increases its shareholding in MJVG to at least 75% (and accordingly MJVG becomes a member of the venturing group).
5
6
“The reduced notional amount” means—
a
the amount of notional income calculated in accordance with section 539, less
b
the amount of notional income already charged to tax under section 538 when the notice under section 587(1) or (2) was given or (as the case may be) when MJVG became a member of the joint venture group.