IFM22020 - Real Estate Investment Trust : Conditions and Tests: Property Rental Business: Summary
To join and remain in the regime, a UK-REIT is required to
A. own at least three qualifying properties (IFM22025) and
B. no single property represents more than 40% by value of the assets of the property rental business (IFM22035).
Conditions A and B are set out at CTA2010/S529. They must be met throughout the accounting period of the company or group.
For these conditions, the CTA2010/S519 definition of ‘property rental business’ is used. For more detail on the definition and exclusions, see IFM21020 onwards. Note that for UK-REIT purposes, the UK and overseas property businesses of a company are treated as being a single business.
For a Group REIT, the property rental businesses of all the members of the group are treated as being a single business (CTA210/S529(3)). Property rental business Conditions A and B must be met by that single business. This means that each member of the group does not have to meet these conditions on their own.
Failing to meet conditions A and/or B does not result in automatic removal from the regime, provided the breach is minor. Repeated breaches of conditions A and B may result in removal from the regime (see IFM27030)