Corporation Tax Act 2010

785 Treatment of payer: Real Estate Investment Trusts

(1) If a company (“the payer”) pays a manufactured dividend, subsections (2) to (4) apply so far as the manufactured dividend is representative of a dividend which—

(a) is paid by a company UK REIT in respect of profits or gains (or both) of the company’s property rental business, or

(b) is paid by the principal company of a group UK REIT in respect of profits or gains (or both) of members of the group as shown in the financial statement under section 532(2)(b) (statement of group’s property rental business in UK).

(2) If the manufactured dividend is paid in the course of a trade carried on in the United Kingdom, the manufactured dividend is treated as an expense of the trade.

(3) If the manufactured dividend is paid in connection with investment business, the manufactured dividend is treated as expenses of management for the purposes of Part 16 of CTA 2009 (companies with investment business).

(4) If the payer carries on life assurance business, so far as the manufactured dividend meets one of the conditions in subsection (5) it is treated as if it were an expense payable falling to be brought into account at Step 3 in section 76(7) of ICTA (amount of expenses deduction).

(5) The conditions are that the manufactured dividend—

(a) is referable to basic life assurance and general annuity business,

(b) is treated under section 432A of ICTA (apportionment of income and gains) as so referable, or

(c) would be so treated if received by the payer.

(6) In this section—

• “company UK REIT” has the same meaning as in Part 12 (Real Estate Investment Trusts) (see section 524(5)),

• “group UK REIT” has the same meaning as in that Part (see section 523(5)),

• “principal company” has the same meaning as in that Part (see section 606), and

• “property rental business” has the same meaning as in that Part (see section 519).

(7) This section is subject to—

(a) section 796 (manufactured dividends: amounts exceeding underlying payments), and

(b) section 803 (power to deal with special cases).