IFM29400 - Real Estate Investment Trust :Prescribed arrangements: 2009/3315 - Real Estate Investment Trusts (Prescribed Arrangements) Regulations 2009
The prescribed arrangements are contained in SI2009/3315 Real Estate Investment Trusts (Prescribed Arrangements) Regulations.
“Prescribed arrangements” are arrangements (whether or not part of other arrangements) which have the purpose, or one of the main purposes, of allowing a REIT company to meet one or more of the following
- CTA2010/S529 (conditions as to property rental business),
- CTA2010/S530 (conditions as to distribution of profits)
- CTA2010/S531 (conditions as to balance of business)
- CTA2010/S604 (2) class 3 (exclusion of owner-occupied property from the property rental business)
where, but for the arrangements, those conditions would not be satisfied.
However an arrangement is not prescribed if it is effected solely for genuine commercial purposes or between persons dealing at arm’s length.
An arrangement is any agreement, understanding, scheme, share reorganisation, transaction or series of transactions (whether or not legally enforceable).
Where a REIT company C enters into prescribed arrangements with a person P, resulting in an amount of income, expense, asset or liability being taken into or out of account in C’s property rental business or residual business, then C, P and any person Q in which C or P have a direct or indirect interest are treated as members of the same REIT group for the purposes of the application of CTA2010/Part 12, from the beginning of the accounting period in which the arrangements are made. Person Q is not included in the REIT group where it can be shown that they fall outside the scope of the prescribed arrangements.
For these purposes “person” includes, but is not limited to—
(a) a legal person,
(b) a natural person,
(c) a partnership,
(d) a limited partnership,
(e) a limited liability partnership,
(f) a trust, and
(g) any other body of persons.
The inclusion of P or P and Q as members of the REIT group will result in the breach of one of the conditions in CTA2010/S529, S530 or S531. (see [The prescribed arrangements are contained in SI2009/3315 Real Estate Investment Trusts (Prescribed Arrangements) Regulations.
“Prescribed arrangements” are arrangements (whether or not part of other arrangements) which have the purpose, or one of the main purposes, of allowing a REIT company to meet one or more of the following
- CTA2010/S529 (conditions as to property rental business),
- CTA2010/S530 (conditions as to distribution of profits)
- CTA2010/S531 (conditions as to balance of business)
- CTA2010/S604 (2) class 3 (exclusion of owner-occupied property from the property rental business)
where, but for the arrangements, those conditions would not be satisfied.
However an arrangement is not prescribed if it is effected solely for genuine commercial purposes or between persons dealing at arm’s length.
An arrangement is any agreement, understanding, scheme, share reorganisation, transaction or series of transactions (whether or not legally enforceable).
Where a REIT company C enters into prescribed arrangements with a person P, resulting in an amount of income, expense, asset or liability being taken into or out of account in C’s property rental business or residual business, then C, P and any person Q in which C or P have a direct or indirect interest are treated as members of the same REIT group for the purposes of the application of CTA2010/Part 12, from the beginning of the accounting period in which the arrangements are made. Person Q is not included in the REIT group where it can be shown that they fall outside the scope of the prescribed arrangements.
For these purposes “person” includes, but is not limited to—
(a) a legal person,
(b) a natural person,
(c) a partnership,
(d) a limited partnership,
(e) a limited liability partnership,
(f) a trust, and
(g) any other body of persons.
The inclusion of P or P and Q as members of the REIT group will result in the breach of one of the conditions in CTA2010/S529, S530 or S531. (see](https://www.gov.uk/hmrc-internal-manuals/investment-funds/ifm27000) onwards)