Taxes Consolidation Act 1997 section 705N

Breach of conditions regarding distributions

Section 705N imposes a corporation tax charge on a REIT or group REIT that fails to distribute at least 85 per cent of its property income for an accounting period.

• Where a REIT or group REIT does not distribute at least 85% of its property income for an accounting period, a corporation tax charge arises under Case IV of Schedule D.
• The amount chargeable is the difference between 85% of the property income for the period and the amount of property income actually distributed.
• No loss, deficit, expense or allowance may be set off against the amount chargeable to corporation tax.
• The charge does not apply to the extent that the REIT or group REIT is restricted from making a distribution by any provision of the Companies Acts.