IFM28054 | Real Estate Investment Trust : Distributions: attribution rules: Takeovers/mergers: CTA2010/S550

Where a company/group UK-REIT (existing REIT) is the subject of a takeover by another UK-REIT (new REIT) any outstanding distribution requirement of the existing REIT may be met by the new REIT.

Example

Group UK-REIT A has property rental business profits for accounting period ending 31/12/17 of £100. Principal company A has a distribution requirement under CTA2010/S530 of £90 on or before 31/12/17. A is acquired by Group UK-REIT B on 31/03/18, the £90 distribution requirement has still to be met. The principal company of B assumes responsibility for meeting A’s distribution requirement for the accounting period to 31/12/17.

If no distribution was made in respect of this requirement then a charge arises on the residual business of the principal company B (CTA2010/S564) – see IFM27045