Introduction Overview Chapter 2: Requirements for being a UK REIT Section 532:Financial statements for group UK REITs
1652.This section sets out the requirements which need to be satisfied for the purposes of section 527(2)(e). It is based on paragraphs 3(3), 31(2) and 32(8) of Schedule 17 to FA 2006.
1653.According to paragraph 32(2) of Schedule 17 to FA 2006:
“business carried on by a non-UK resident company is property rental business for the purposes of the Part if the business would be property rental business … if it were carried on by a UK resident company”
1654.It follows that a financial statement required byparagraph 31(2)(a) of Schedule 17 to FA 2006 includes theworldwide property rental business of a non-resident company. This is consistent with the rule about the profits and gains of a UK property rental business in paragraph 32(8)(d) of Schedule 17 to FA 2006.
1655.So subsection (2)(a) provides that the financial statements should include the worldwide property rental business of the group.
1656.Subsection (2)(b) provides that the principal company must prepare financial statements for the group’s property rental business in the United Kingdom. Subsection (3) defines the group’s property rental business in the United Kingdom as property rental business carried on by UK companies and UK property rental business of non-UK companies.
1657.Subsection (2)(c) provides that the principal company must prepare financial statements for the group’s residual business. Financial statements under subsection(2)(c) relate to all business which is not property rental business. For non-UK companies “residual business” includesworldwidebusiness which is not property rental business.
1658.The requirement to prepare financial statements under subsection (2)(a) and (b) also applies to venturing companies and venturing groups (defined in section 585) and the relevant percentage of profits of property rental business of the joint venture company. See section 588(1)which treats a joint venture company as a member of the group UK REIT and section 588(2) which treats a company UK REIT and a joint venture company as forming a group UK REIT.
1659.Financial statements under this section exclude any “non-member percentage” (that is, any percentage of the beneficial interest in a member of the group held by a non-member) – see section 533(3).