IFM28060 - Real Estate Investment Trust : Distributions: administration by UK-REIT: SI2006/2867

General

When the company makes distributions or other payments that are treated as distributions for tax purposes, they can be treated in two ways.Ìý

To the extent the distributions represent distributions of profits of the property rental business, they are in general payable under deduction of tax at the basic rate of income tax (20%) (ITA2007/S973 and 974). The guidance refers to this kind of distribution as a 바카라 사이트˜property income distribution바카라 사이트™ or PID (although the legislation does not use this term or abbreviation, and the regulations (SI2006/2867) refer to them as 바카라 사이트˜relevant distributions바카라 사이트™).ÌýÌý

The company is required to account quarterly to HMRC for tax deducted from a PID.In some circumstances, a PID must be paid gross see (IFM28125).Ìý

The company must provide recipients of a PID with a statement in writing, showing the amount of tax deducted from their PID.

Where a PID has been paid to a partnership partially gross and partially with tax deducted (see IFM28125), the company must provide the partnership with a statement setting out the partners in respect of whom tax has been deducted and showing the amount of tax deducted in respect of each of those partners (SI 2006/2867/Reg7A(6)).

The detailed administrative arrangements regarding gross/ net payments, accounting for the tax and quarterly returnsÌýare set out in regulations (SI 2006/2867), and are discussed in more detail in IFM28115 onwards.Ìý

All other payments made by the company are treated according to the normal rules for company distributions in CTA2009/Part 9A and CTA2010/Part 23.Ìý See Company Taxation Manual for guidance. Ìý

Group REITs and subsidiaries

The PID rules that apply to a single company UK-REIT apply also to the principal company of a Group REIT.Ìý

The PID rules do not apply to distributions made by other members of a Group REIT, by subsidiaries of the group where the Group REIT's interest is less than 75%, by joint venture companies in which a single company UK-REIT or Group REIT has shares or by subsidiaries in which a single company REIT has shares.Ìý The distributions made by these companies are never treated as PIDs, and so are dealt with under the normal rules for company distributions in CTA2009/Part 9A and CTA2010/Part 23. Ìý Ìý

Former UK-REITs

The obligation to pay PIDs and to make returns of payments (including the reconciliation) of PID for a company that was a UK-REIT, or a company that was the principal company of a Group REIT continues so long as there are distributable reserves attributable to profits or gains from the property rental business carried on while CTA2010/Part 12 applied to them. (IFM28055)ÌýÌý