IFM22305 - Real Estate Investment Trust : Group conditions and rules: Financial Statements: Joint Ventures: CTA2010/S533 and S588

A REIT company/group (venturing company/group) may have an interest in a joint venture company/group. If a joint venture look through notice (see IFM30005) is given then this impacts on the financial statements as follows:

Group UK- REITs and joint venture companies

A group may be involved in a joint venture carried on via a company. If there is a Joint Venture Look-Through notice in place (CTA2010/S586) (see IFM30005), then the group (referred to as the venturing group) must include the income, assets etc of the joint venture company in the three sets of financial statements in the same way as it does for the same items for companies that are members of the venturing group (CTA2010/S588).

Single company UK-REITs and joint venture companies

A single company UK-REIT may be involved in a joint venture carried on via a company. If there is a Joint Venture Look-Through notice in place (CTA2010/S586) (see IFM30005), then the company (referred to as the venturing company) is obliged to prepare three sets of financial statements equivalent to those required of the principal company of a Group REIT (CTA2010/S588).

The venturing company must include the income, assets etc of the joint venture company in the three sets of financial statements in the same way as the principal company of a Group REIT would deal with the same items for companies that are members of their group (CTA2010/S588).

Joint Venture Groups

Where a joint venture look through notice is given in respect of a joint venture group the principal company of the joint venture group must prepare the three sets of financial statements under CTA2010/S532 in the same way that a group REIT does (CTA2010/S592). The amount of profits, expenses, gains, losses, assets and liabilities to be included in the financial statements is the percentage of beneficial interest held by the venturing company/group (CTA2010/S593).

The venturing company/group must also produce three financial statements, incorporating the relevant detail from the joint venture group’s statements. (CTA2010/S588)