Taxes Consolidation Act 1997 section 705HA

Profit: calculating profits available for distribution

Section 705HA ensures that only expenses incurred wholly and exclusively for the purposes of a REIT's property rental business are deductible, and imposes a tax charge where non-qualifying expenses have been deducted.

• Any expense deducted in computing a REIT's aggregate profits that was not wholly and exclusively for the property rental business is a "disallowed amount".
• The REIT (or the principal company of a group REIT) is treated as receiving income equal to the disallowed amount.
• That deemed income is chargeable to corporation tax under Case IV of Schedule D in the accounting period in which the disallowed amount was taken into account.
• No loss, deficit, expense or allowance may be set off against the deemed income.