IFM30015 | Real Estate Investment Trust : Joint ventures: conditions to give a Joint Venture Look-Through Notice: CTA2010/S586 and S587

The Joint Venture legislation at CTA2010/S584 and S585 refers to the UK-REIT company/group as the ‘venturing company’ or ‘venturing group’ and the company/group through which the joint venture is carried on as the ‘joint venture company’ or ‘joint venture group’. The conditions that have to be met to give a joint venture Notice for the REIT legislation to apply to a joint venture are set out in CTA2010/S586 and S587. The conditions are that:

• the joint venture company or one or more members of the joint venture group carries on a property rental business

• the UK-REIT’s interest, held by the UK-REIT company or by one or more members of the UK-REIT group, in the joint venture company/principal company of a joint venture group must meet the 40% test:-

The UK-REIT must be beneficially entitled to

40% of the profits available for distribution to equity holders in the joint venture company/principal company of the joint venture group, and

40% of the assets of the joint venture company/principal company of the joint venture group in the event of a winding up.

• the JV company/group must consent to the JV notice and

• the notice must be in writing, specify the joint venture company/group concerned, and the date from which Part 12 is to apply in relation to the joint venture property rental business.

As with subsidiaries of a Group REIT, there are no special rules or limitations on the types of share capital, financing or the residence of the joint venture company.

A joint venture notice may be given at the same time as a notice under CTA2010/S523 or 524 (notice of company/group electing into the UK-REIT regime) or at any time later whilst the venturing company/group is a UK-REIT.

For financial statements requirements see IFM30027

For exempt business and other conditions relating to the joint venture see IFM30030