IFM30025 | Real Estate Investment Trust : Joint ventures: Joint Venture Look-Through Notice: effects of notice: CTA2010/S588 and S589

When the notice comes into effect, the consequences for the joint venture company or group are the same as for a company that joins an already established Group REIT: CTA2010/S588 and S589 apply the REIT legislation to the joint venture company or group companies as though they are part of a REIT group. So that the following applies to the joint venture company/group

• the property rental business previously carried on by the joint venture ceases on the day the look-through notice becomes effective;

• the joint venture is deemed to have sold and immediately reacquired the assets involved in its property rental business on that day;

• chargeable gains and losses on the deemed sales are ignored;

• transfer of the assets to the property rental business of the joint venture company takes place so as to give rise to no balancing charges or allowances; and

• income and gains of the property rental business of the joint venture are exempt from CT.

As with companies joining a Group REIT, the cessation, deemed sales etc relate only to the proportion of the joint venture owned by the venturing company or group. For financial statements requirements see IFM30027

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