Taxes Consolidation Act 1997 section 705P

Effect of cessation

Section 705P deals with the corporation tax consequences when a company or group ceases to be designated as a Real Estate Investment Trust (REIT) or group REIT.

• Where a notice of cessation is given (whether by the company or by Revenue), the company or group is treated for corporation tax purposes as having ceased to be a REIT or group REIT on the date specified in the notice.
• If the REIT or group REIT has been operating as such for at least 15 years at the time of the notice, a deemed disposal and reacquisition of assets is triggered.
• The deemed disposal occurs immediately before the cessation date and the reacquisition occurs immediately after, both at market value on that date.
• Where the 15-year condition is not met, no deemed disposal and reacquisition arises on cessation.