The Real Estate Investment Trusts (Prescribed Arrangements) Regulations 2009

• Citation: S.I. 2009/3315
• Sections: 6

Section 1 Citation, commencement and effect

(1) These Regulations may be cited as the Real Estate Investment Trusts (Prescribed Arrangements) Regulations 2009 and shall come into force forthwith.

(2) These Regulations shall have effect in relation to prescribed arrangements made on or after 7th May 2009 and during an accounting period which ends on or after 15th December 2009.

Section 2 Interpretation

(1) In these Regulations—

(a) a reference to Part 4 is a reference to Part 4 of the Finance Act 2006 (real estate investment trusts), and

(b) a reference to a section (without more) is a reference to that section of the Finance Act 2006.

(2) For the purposes of these Regulations, “person” includes, but is not limited to—

(a) a legal person,

(b) a natural person,

(c) a partnership,

(d) a limited partnership,

(e) a limited liability partnership,

(f) a trust, and

(g) any other body of persons.

(3) For the purposes of these Regulations—

“arrangements” include any agreement, understanding, scheme, share reorganisation, transaction or series of transactions (whether or not legally enforceable), and

“prescribed arrangements” are arrangements (whether or not part of other arrangements) which have the purpose, or one of the main purposes, of allowing a REIT company to meet one or more of the conditions set out in sections 107 (conditions for tax exempt business) and 108 (conditions for balance of business) where, but for the arrangements, those conditions would not be satisfied.

Section 3 Situations in which these Regulations apply

(1) These Regulations apply if conditions A and B are satisfied.

(2) Condition A is that an amount (“the specified amount”)—

(a) falls to be taken into account as part of a REIT company’s tax exempt or residual business, or

(b) ceases to be taken into account as part of such business.

(3) For the purposes of condition A, the specified amount may be taken into account (or may cease to be taken into account) as a liability, an expense, an asset or income.

(4) Condition B is that the specified amount arises directly or indirectly from, or in consequence of, or otherwise in connection with, prescribed arrangements.

Section 4 Excluded arrangements

(1) For the purposes of these Regulations, arrangements are not prescribed arrangements if at least one of the following conditions is satisfied.

(2) Condition 1 is that the arrangements have been effected solely for genuine commercial purposes.

(3) Condition 2 is that the arrangements are made between persons dealing at arm’s length.

Section 5 Persons to be treated as member of REIT group in certain situations

(1) Where a REIT company enters into prescribed arrangements with a person (“the person in question”), subject to paragraph (3), the entities listed in paragraph (2) shall be treated as members of the same REIT group for the purposes of the application of Part 4, from the beginning of the accounting period in which the arrangements are made.

(2) The entities are—

(a) the REIT company,

(b) the person in question, and

(c) any person in which either the person in question, or the REIT company, have a direct or indirect interest.

(3) But a person within paragraph (2)(c) shall not be treated as a member of the REIT group where it can be shown that the person falls outside the scope of the prescribed arrangements.

Section 6 Effect of regulations for corporation tax purposes

(1) This regulation applies if—

(a) a company enters into prescribed arrangements which take effect during the accounting period specified in a notice given under section 109 (notice), and

(b) that Part ceases to apply to it by reason of section 129 (termination notice: Commissioners).

(2) Any corporation tax paid by the company pursuant to section 112 (entry charge) shall be fully taken into account for the purposes of assessing its liability to corporation tax.