{"id":21865,"date":"2023-07-15T22:00:47","date_gmt":"2023-07-15T22:00:47","guid":{"rendered":"https:\/\/legalblog.ie\/?p=21865"},"modified":"2024-04-06T14:42:55","modified_gmt":"2024-04-06T14:42:55","slug":"real-estate-investment-trusts","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/real-estate-investment-trusts\/","title":{"rendered":"REITs"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/real-estate-investment-trusts\/#REITs\" title=\"REITs\">REITs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/real-estate-investment-trusts\/#Key_Requirements\" title=\"Key Requirements\">Key Requirements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/real-estate-investment-trusts\/#Notice_to_Revenue\" title=\"Notice to Revenue\">Notice to Revenue<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/real-estate-investment-trusts\/#Shares_Dividends\" title=\"Shares &amp; Dividends\">Shares &amp; Dividends<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/real-estate-investment-trusts\/#Excess_Holding\" title=\"Excess Holding\">Excess Holding<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/real-estate-investment-trusts\/#Internal_REIT_Tax_Issues\" title=\"Internal REIT Tax Issues\">Internal REIT Tax Issues<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/legalblog.ie\/real-estate-investment-trusts\/#2019_REIT_Amendments\" title=\"2019 REIT Amendments\">2019 REIT Amendments<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"REITs\"><\/span>REITs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Finance Act 2013 provides for real estate investment trusts (REITs).\u00a0 They are companies with a diversified share ownership base whose shares can be purchased and sold.\u00a0 A REIT must be resident and incorporated in the state.\u00a0 The shares must be listed on a recognised stock exchange within the EU.\u00a0 It must not be a close company.<\/p>\n<p>Real estate investment trusts are exempted from corporation tax, income and capital gains tax.\u00a0 They must distribute 85 percent of the property income by way of property income dividends.\u00a0 Its shareholders are subject to income tax USC and PRSI on distributions received.\u00a0 Companies are subject to a 25 percent income tax.<\/p>\n<p>The dividends are subject to dividend withholding tax.\u00a0 A non-resident may be entitled to a refund or exemption in some cases. REIT shareholders are subject to capital gains tax on the disposal of their shares.\u00a0 Non-residents are exempt from capital gains tax on the disposal of their shares.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Key_Requirements\"><\/span>Key Requirements<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A REIT must derive at least 75 percent of its income from property rental or disposals. A REIT must comply with conditions during the relevant period in order to obtain an exemption on its income and capital gains of its property rental business.<\/p>\n<p>A REIT must be resident and incorporated in the state.\u00a0 The shares must be listed on a recognised stock exchange within the EU.\u00a0 It must not be a close company.<\/p>\n<p>At least 40 percent of its income must derive from the property rental business.\u00a0 It must undertake a property rental business with at least three properties. The market value of any one property cannot be more than 40 percent of the total.<\/p>\n<p>A REIT must maintain a property financing cost ratio as designed.\u00a0 1.25:1.00 REIT financing costs ratio is the ratio of property income and financing costs and property financing costs.<\/p>\n<p>The requirement to be listed and not to be a close company must be satisfied in the relevant accounting period.\u00a0 Some conditions need only be met within three years commencing on the day the company becomes a REIT or part of a REIT group.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Notice_to_Revenue\"><\/span>Notice to Revenue<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>REITs make an initial notification to the Revenue to claim status.\u00a0 Thereafter, an annual return must be made in electronic form and confirm compliance with conditions. In the case of a group REIT, all the members of the group must be listed.<\/p>\n<p>Each time a new member is added to the group, a revised notice (form REIT 2A) must be submitted to Revenue within 30 days after the date on which the new member is added to the group. \u00a0If it fails to meet the condition, it must notify Revenue and give explanations. Measures must be taken to prevent recurrence.<\/p>\n<p>If assets are acquired for future development and the cost of the development exceeds 30 percent of market value at the commencement of the development, the profit arising is subject to 25 percent tax if it is disposed of within three years after completion of development.<\/p>\n<p>Where a property has been disposed of, profits arising from investment of the proceeds for up to 24 months are treated as property profits.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Shares_Dividends\"><\/span>Shares &amp; Dividends<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Shares in REIT are to form part of their ordinary share capital or be preference shares with no voting rights.\u00a0 Not more than one class of ordinary shares may be issued.<\/p>\n<p>Dividends are subject to 25 percent standard rate tax. This was 20% before Finance Act 2019. Unlike the case with other dividends, they are taxable in the hands of non-residents.<\/p>\n<p>Dividend Withholding Tax applies to non-residents. \u00a0They may be entitled to a refund or credit under a double taxation agreement.\u00a0 There are exemptions for distributions to pension funds and insurance companies.<\/p>\n<p>A dividend paid to a company is potentially taxable and it is not subject to general exemptions for receipts of dividends. This does not apply to payments within the REIT group itself.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Excess_Holding\"><\/span>Excess Holding<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Where a shareholders who have more than a 10 percent interest, the company may be charged to tax for the amount equal to the distribution but has not taken reasonable steps to prevent distribution to such person. Where a REIT or group REIT makes a distribution to a holder of excess rights, the distribution will be treated as an amount of income in the hands of the REIT or the principal company of a group REIT.<\/p>\n<p>The distribution will be chargeable to corporation tax under Case IV of schedule D and regarded as income arising in the period in which the distribution is made without the set off of any loss, deficit, expense or allowance.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Internal_REIT_Tax_Issues\"><\/span>Internal REIT Tax Issues<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Finance Act 2013 provides that capital gains tax group relief in relation to transfer of assets do not apply where the transferee group is a real estate investment trust or a member of a REIT group.\u00a0 A group REIT must notify the Revenue Commissioners when a company becomes a member of its group.<\/p>\n<p>REITs are exempt from DIRT.\u00a0 They may be liable to income tax in respect of interest income.\u00a0 They are not chargeable to tax for 24 months in respect of profits from the investment of cash raised through subscription of ordinary shares and disposal of rental properties.<\/p>\n<p>Where a company becomes a REIT, its assets are deemed to be purchased and be reacquired for capital gains tax purposes.\u00a0 The consideration is deemed to be the market value of the assets concerned.<\/p>\n<p>Where an asset ceases to be used for the REIT business and is used for other non-property rental businesses, it is deemed to have been sold by the REIT and acquired a market value.\u00a0 There is also deemed to be an acquisition for market value where an asset used for the residual business commences to be used for the REIT purpose.<\/p>\n<p>Where an REIT does not distribute 85 percent of its property income by way of dividend, the REIT is charged to corporation tax at 25 percent of the amount equal to the difference between the amounts distributed and 85 percent of the property income. Expenses or allowances maybe set off against that amount.<\/p>\n<p>Where an entity ceases to be in REIT it must deliver a cessation notice to the Revenue.\u00a0 The assets are deemed to the disposed of only required at market values.<\/p>\n<p>The REIT provisions do not apply to transactions engaged in by an REIT or to which is directly or indirectly a party unless it is undertaken for bona fide commercial reasons and is not part of arrangement or scheme, the main purpose or one of the main purposes of which is the avoidance of tax liability.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2019_REIT_Amendments\"><\/span>2019 REIT Amendments<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2019 makes a number of amendments to the Real Estate Investment Trust (REIT) regime, introduced by Finance Act 2013. This section:<\/p>\n<ul>\n<li>Inserts a requirement that any expense deducted when calculating the REIT profits available for distribution must be incurred wholly and exclusively for the purposes of the REIT business and any excessive amounts are charged to tax in the hands of the REIT;<\/li>\n<li>Provides that distributions comprising the proceeds of property disposals are subject to dividend withholding tax;<\/li>\n<li>Provides that the REIT must either reinvest the proceeds of a property disposal in the REIT property business or distribute the proceeds within a 24 month period. Amounts not so reinvested or distributed will fall to be treated as part of the REIT\u2019s property income, 85% of which must be distributed annually; and<\/li>\n<li>Provides that on the cessation of being a REIT or group REIT a deemed disposal and re-acquisition of REIT assets will occur only where the REIT or group REIT has been in existence for at least 15 years.<\/li>\n<\/ul>\n<p><!--nextpage--><\/p>\n<h2>TAXES CONSOLIDATION ACT<\/h2>\n<p>&nbsp;<\/p>\n<p>Part 25 Industrial and Provident Societies, Building Societies, and Trustee Savings Banks (ss. 698-705)<br \/>\nChapter 1 Industrial and provident societies (ss. 698-701)<br \/>\n698. Interpretation (Chapter 1).<br \/>\nIn this Chapter, except where the context otherwise requires &#8211;<\/p>\n<p>&#8220;loan interest&#8221; in relation to a society, means any interest payable by the society in respect of any mortgage, loan, loan stock or deposit;<\/p>\n<p>&#8220;share interest&#8221; in relation to a society, means any interest, dividend, bonus or other sum payable to a shareholder of the society by reference to the amount of the shareholder&#8217;s holding in the share capital of the society;<\/p>\n<p>&#8220;society&#8221; means a society registered under the Industrial and Provident Societies Acts, 1893 to 1978.<\/p>\n<p>references to the payment of share interest or loan interest include references to the crediting of such interest.<\/p>\n<p>699. Deduction as expenses of certain sums, etc.<br \/>\n(1)In computing for the purposes of Case I of Schedule D the profits or gains of a society, there shall be deducted as expenses any sums which &#8211;<\/p>\n<p>(a)represent a discount, rebate, dividend or bonus granted by the society to members of the society or other persons in respect of amounts paid or payable by or to them on account of their transactions with the society, being transactions taken into account in that computation and calculated by reference to those amounts or to the magnitude of those transactions and not by reference to the amount of any share or interest in the capital of the society;<\/p>\n<p>(b)are share interest or loan interest paid by the society, being interest wholly and exclusively laid out or expended for the purposes of the trade.<\/p>\n<p>(2)<\/p>\n<p>(a)Where for the year 1962-73 or any previous year of assessment an annual allowance, balancing allowance or balancing charge in respect of capital expenditure on the construction of a building or structure might have been made to or on a society under Part V of the Finance Act, 1959, but for the circumstance that the society was exempt from tax under Schedule D, any writing down allowance, balancing allowance or balancing charge to be made in respect of the expenditure under Part 9 for any chargeable period shall be computed as if every annual allowance, balancing allowance and balancing charge which might have been so made had been made; but nothing in this paragraph shall affect section 274(8).<\/p>\n<p>(b)Where for the year 1962-73 or any previous year of assessment an annual allowance in respect of capital expenditure on the purchase of patent rights might have been made to or on a society under Part V of the Finance Act, 1959, but for the circumstance that the society was exempt from tax under Schedule D, the amount of the expenditure remaining unallowed (within the meaning of section 756) shall, in relation to any balancing allowance or balancing charge under Chapter 1 of Part 29 to be made to or on the society in respect of the expenditure for any chargeable period, be computed as if every annual allowance which might have been so made had been made.<\/p>\n<p>700. Special computational provisions.<br \/>\n(1)Notwithstanding anything in the Tax Acts, other than Chapter 5 of Part 8, any share or loan interest paid by a society &#8211;<\/p>\n<p>(a)shall be paid without deduction of income tax and shall be charged under Case III of Schedule D, and<\/p>\n<p>(b)shall not be treated as a distribution;<\/p>\n<p>but paragraph (a) shall not apply to any share interest or loan interest payable to a person whose usual place of abode is not in the State.<\/p>\n<p>(1A)For the purposes of subsection (1), &#8216;society&#8217; shall include a credit union which is &#8211;<\/p>\n<p>(a)registered as such under the Credit Union Act, 1997, or<\/p>\n<p>(b)deemed to be so registered by virtue of section 5(3) of that Act.<\/p>\n<p>(2)In computing the corporation tax payable for any accounting period of a society, section 243 shall apply subject to the deletion of &#8220;yearly&#8221; in subsection (4)(a) of that section.<\/p>\n<p>(3)On or before 31 January in each year, every society shall deliver to the inspector a return in such form as the Revenue Commissioners may prescribe specifying &#8211;<\/p>\n<p>(a)the name and place of residence of every person to whom share interest or loan interest amounting to the sum of \u20ac90 or more has been paid by the society in the year of assessment which ended before that date, and<\/p>\n<p>(b)the amount of such share interest or loan interest paid in that year to each of those persons,<\/p>\n<p>and, if such a return is not fully made as respects any year of assessment, the society shall not be entitled to any deduction under section 97(2)(e), 243 or 699(1) in respect of any payments of share interest or loan interest which it was required to include in the return, and assessments shall, as necessary, be made or amended to give effect to this subsection.<\/p>\n<p>701. Transfer of shares held by certain societies to members of society.<br \/>\n(1)In this section &#8211;<\/p>\n<p>&#8220;company&#8221; has the meaning assigned to it by section 5(1);<\/p>\n<p>&#8220;consideration&#8221; means consideration in money or money&#8217;s worth;<\/p>\n<p>&#8220;control&#8221;, in relation to a company, shall be construed in accordance with section 432;<\/p>\n<p>&#8220;society&#8221; means a society registered under the Industrial and Provident Societies Acts, 1893 to 1978, which is an agricultural society or a fishery society within the meaning of section 133(1)(a).<\/p>\n<p>(2)<\/p>\n<p>(a)In this subsection and in subsection (4), &#8220;the appropriate number&#8221;, in relation to a member&#8217;s original shares, means such portion (or as near as may be to such portion) of the total number of the referable shares owned by the member at the time of the transfer as bears to that number the same proportion as the total number of shares in the company which are subject to the transfer bears to the total number of shares in the company owned by the society immediately before the transfer, and the number of the referable shares owned by a member shall be an amount determined by the formula &#8211;<\/p>\n<p>&nbsp;<\/p>\n<p>where &#8211;<\/p>\n<p>Ais the market value of the shares in the company owned by the society immediately before the transfer,<\/p>\n<p>Bis the total number of the shares in the society in issue immediately before the transfer,<\/p>\n<p>Cis the market value of the total assets (including the shares in the company) of the society immediately before the transfer, and<\/p>\n<p>Dis the number of shares in the society owned by the member immediately before the transfer.<\/p>\n<p>(b)Where on or after the 6th day of April, 1993, a society, being a society which at any time on or after that date controls or has had control of a company, transfers to the members of the society shares owned by it in the company (in this section referred to as &#8220;the transfer&#8221;) and &#8211;<\/p>\n<p>(i)the transfer, in so far as it relates to any member, is in respect of and in proportion to, or as nearly as may be in proportion to, that member&#8217;s holding of shares (in this section referred to as &#8220;the original shares&#8221;) in the society immediately before the transfer,<\/p>\n<p>(ii)no consideration (apart from the consideration given by the members represented by the cancellation of the original shares referred to in subparagraph (iii)) for, or in connection with, the transfer is given to or received from any member (or any person connected with that member) by the society (or any person connected with the society), and<\/p>\n<p>(iii)on the transfer or as soon as possible after the transfer, the original shares (or the appropriate number of those shares) of each member are cancelled without any consideration (apart from the consideration given to the members represented by the transfer to the members of the shares in the company) for or in connection with such cancellation being given to or received from any member (or any person connected with that member) by the society (or any person connected with the society) and, where the original shares (or the appropriate number of those shares) have been issued to a member at different times, any cancellation of such shares shall involve those issued earlier rather than those issued later,<\/p>\n<p>then, subject to subsection (5), subsections (3) and (4) shall apply.<\/p>\n<p>(3)For the purposes of the Corporation Tax Acts, the transfer shall be treated as &#8211;<\/p>\n<p>(a)not being a distribution within the meaning of Part 6, and<\/p>\n<p>(b)being for a consideration of such amount as would secure that, for the purposes of charging the gain on the disposal by the society of the shares owned by it in the company, neither a gain nor a loss would accrue to the society.<\/p>\n<p>(4)For the purposes of the Capital Gains Tax Acts &#8211;<\/p>\n<p>(a)the cancellation of the original shares (or the appropriate number of those shares) shall not be treated as involving any disposal of those shares, and<\/p>\n<p>(b)each member shall be treated as if the shares transferred to that member in the course of the transfer were acquired by that member at the same time and for the same consideration at which the original shares (or the appropriate number of those shares) were acquired by that member and, for the purposes of giving effect to this paragraph, where the original shares (or the appropriate number of those shares) have been issued to a member at different times, there shall be made all such apportionments as are in the circumstances just and reasonable.<\/p>\n<p>(5)This section shall not apply unless it is shown that the transfer is effected for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose or one of the main purposes is avoidance of liability to corporation tax or capital gains tax.<\/p>\n<p>(6)In a case where this section applies, the society concerned shall include in the return required to be made by it under section 884 a statement of the total number of shares cancelled in accordance with subsection (2)(b)(iii).<\/p>\n<p>Chapter 2 Building societies (ss. 702-703)<br \/>\n702. Union or amalgamation of, transfer of engagement between, societies.<br \/>\n(1)In this section, &#8220;building society&#8221; means a building society within the meaning of the Building Societies Acts, 1874 to 1989.<\/p>\n<p>(2)Where in the course of or as part of a union or amalgamation of 2 or more building societies or a transfer of engagements from one building society to another building society there is a disposal of an asset by one society to another society, both societies shall be treated for the purposes of corporation tax in respect of chargeable gains as if the asset were acquired from the society making the disposal for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the society making the disposal.<\/p>\n<p>703. Change of status of society.<br \/>\n(1)In this section and in Schedule 16 &#8211;<\/p>\n<p>&#8220;building society&#8221; means a building society incorporated or deemed by section 124(2) of the Building Societies Act, 1989, to be incorporated under that Act, and references to &#8220;society&#8221; shall be construed accordingly;<\/p>\n<p>&#8220;successor company&#8221; means a successor company within the meaning of Part XI of the Building Societies Act, 1989.<\/p>\n<p>(2)Schedule 16 shall apply where a society converts into a successor company in accordance with Part XI of the Building Societies Act, 1989.<\/p>\n<p>Chapter 3 Trustee savings banks (ss. 704-705)<br \/>\n704. Amalgamation of trustee savings banks.<br \/>\n(1)In this Chapter and in Schedule 17, &#8220;trustee savings bank&#8221; has the same meaning as in the Trustee Savings Banks Act, 1989.<\/p>\n<p>(2)Where any assets or liabilities of a trustee savings bank are transferred or deemed to be transferred to another trustee savings bank in accordance with Part IV of the Trustee Savings Banks Act, 1989, those banks shall be treated for the purposes of the Tax Acts and the Capital Gains Tax Acts as if they were the same person.<\/p>\n<p>705. Reorganisation of trustee savings banks into companies.<br \/>\nSchedule 17 shall apply to the reorganisation in accordance with section 57 of the Trustee Savings Banks Act, 1989, of &#8211;<\/p>\n<p>(a)one or more trustee savings banks into a company, or<\/p>\n<p>(b)a company referred to in subparagraph (i) of subsection (3)(c) of that section into a company referred to in subparagraph (ii) of that subsection.<\/p>\n<p>Part 25A Real Estate Investment Trusts (ss. 705A-705Q)<br \/>\n705A. Interpretation and application.<br \/>\nIn this Part &#8211;<\/p>\n<p>&#8220;aggregate income&#8221; in relation to a company or group, means the aggregate profits of the company or group, as the case may be, as &#8211;<br \/>\n(a)reduced by the aggregate net gains of the company or group, as the case may be, where aggregate net gains arise, or<br \/>\n(b)increased by the aggregate net losses of the company or group, as the case may be, where aggregate net losses arise;<\/p>\n<p>&#8220;aggregate net gains&#8221; in relation to a company or group, means the amount by which the sum of the gains recognised in arriving at the aggregate profits of the company or group, as the case may be, being gains which arise on the revaluation or disposal of investment property or other non-current assets, exceeds the sum of the losses so recognised, being losses which arise on such revaluation or disposal;<\/p>\n<p>&#8220;aggregate net losses&#8221; in relation to a company or group, means the amount by which the sum of the losses recognised in arriving at the aggregate profits of the company or group, as the case may be, being losses which arise on the revaluation or disposal of investment property or other non-current assets, exceeds the sum of the gains so recognised, being gains which arise on such revaluation or disposal;<\/p>\n<p>&#8220;aggregate profits&#8221; in relation to a company or group, means the profit that is stated in accounts of the company or consolidated accounts of the group, as the case may be, being accounts made up in accordance with relevant accounting standards, or, where such accounts or consolidated accounts, as the case may be, have not been made up, the profits which would be so stated if such accounts or consolidated accounts, as the case may be, were made up in accordance with those standards;<\/p>\n<p>&#8220;authorised officer&#8221; means an officer of the Revenue Commissioners authorised by them in writing to exercise the powers conferred by this Part;<\/p>\n<p>&#8220;control&#8221; shall be construed in accordance with section 432;<\/p>\n<p>&#8220;distribution&#8221; has the same meaning as in the Corporation Tax Acts;<\/p>\n<p>&#8220;group&#8221; means a group of companies comprising a holding company and its wholly-owned subsidiaries and a reference to a member of a group shall be construed as a reference to any company in the group;<\/p>\n<p>&#8220;group Real Estate Investment Trust&#8221; means a group, where &#8211;<br \/>\n(a)the principal company of that group:<br \/>\n(i)has given a notice under section 705E, and<br \/>\n(ii)complies with the conditions in section 705B(1)(a),<br \/>\nand<br \/>\n(b)the group complies with the conditions in section 705B(1)(b),<br \/>\nand any references to &#8216;group REIT&#8217; shall be construed accordingly;<\/p>\n<p>&#8220;holding company&#8221; means a company that holds another company as its wholly-owned subsidiary and, for the purpose of this definition and for the purpose of the definition of &#8216;group&#8217;, a company shall be a wholly-owned subsidiary of another company if and so long as 100 per cent of its ordinary share capital is directly owned by that other company;<\/p>\n<p>&#8220;market value&#8221; shall be construed in accordance with section 548;<\/p>\n<p>&#8220;principal company&#8221; means the company within a group that gives a notice to the Revenue Commissioners under section 705E(2);<\/p>\n<p>&#8220;property income&#8221; in relation to a company or group, means the property profits of the company or group, as the case may be, as &#8211;<br \/>\n(a)reduced by the property net gains of the company or group, as the case may be, where property net gains arise, or<br \/>\n(b)increased by the property net losses of the company or group, as the case may be, where property net losses arise;<\/p>\n<p>&#8220;property income dividend&#8221; means a dividend paid by a REIT or the principal company of a group REIT, as the case may be, from its property income;<\/p>\n<p>&#8220;property net gains&#8221; in relation to a company or group, means the amount by which the sum of the gains recognised in arriving at the aggregate profits of the company or group, as the case may be, being gains which arise on the revaluation or disposal of investment property or other non-current assets which are assets of the property rental business, exceeds the sum of the losses so recognised, being losses which arise on such revaluation or disposal;<\/p>\n<p>&#8220;property net losses&#8221; in relation to a company or group, means the amount by which the sum of the losses recognised in arriving at the aggregate profits of the company or group, as the case may be, being losses which arise on the revaluation or disposal of investment property or other non-current assets which are assets of the property rental business, exceeds the sum of the gains so recognised, being gains which arise on such revaluation or disposal;<\/p>\n<p>&#8220;property profits&#8221; in relation to a company or group, means an amount which is the lesser of &#8211;<br \/>\n(a)the amount which would be the aggregate profits of the company or group, as the case may be, if the residual business, if any, of the company or group, as the case may be, were disregarded, and<br \/>\n(b)the aggregate profits of that company or group, as the case may be;<\/p>\n<p>&#8220;property rental business&#8221; means a business which is carried on by a REIT or a group REIT, as the case may be, for the sole purpose of generating rental income in the State or outside the State, and, for the purpose of this definition, such businesses of a group are to be treated as a single business;<\/p>\n<p>&#8220;qualifying investor&#8221; in relation to a REIT or a group REIT, as the case may be, means &#8211;<br \/>\n(a)an investment undertaking within the meaning of section 739B(1), or<br \/>\n(b)a person referred to in paragraph (a), (b), (f) or (ka) of section 739D(6);<\/p>\n<p>&#8220;Real Estate Investment Trust&#8221; means a company which &#8211;<br \/>\n(a)has given a notice under section 705E, and<br \/>\n(b)complies with the conditions in section 705B(1),<br \/>\nand any references to &#8216;REIT&#8217; shall be construed accordingly;<\/p>\n<p>&#8220;recognised stock exchange&#8221; means a stock exchange in a Member State, being a stock exchange which &#8211;<br \/>\n(a)is regulated by the appropriate regulatory authority of that Member State, and<br \/>\n(b)other than in the case of the Irish Stock Exchange, has substantially the same level of recognition in that Member State as the Irish Stock Exchange has in the State;<\/p>\n<p>&#8220;relevant accounting standards&#8221; has the meaning assigned to it in Schedule 17A;<\/p>\n<p>&#8220;rental income&#8221; means any rent-charge or payment in the nature of rent in respect of &#8211;<br \/>\n(a)residential premises within the meaning of section 96(1), and<br \/>\n(b)any building other than such residential premises;<\/p>\n<p>&#8220;residual business&#8221; in relation to a REIT or a group REIT, means any business carried on by the REIT or group REIT, as the case may be, which is not property rental business;<\/p>\n<p>&#8220;specified accounting period&#8221; means the accounting period in which the company or principal company, as the case may be, gives a notice under section 705E;<\/p>\n<p>&#8220;specified debt&#8221; means any debt incurred by a REIT or group REIT in respect of monies borrowed by, or advanced to, the REIT or group REIT, as the case may be;<\/p>\n<p>&#8220;specified return date for the accounting period&#8221; has the same meaning as in section 959A;<\/p>\n<p>&#8220;the Acts&#8221; means the Tax Acts and the Capital Gains Tax Acts.<\/p>\n<p>705B. Conditions for notice under section 705E.<br \/>\n(1)Subject to subsections (2) and (3), the notice referred to in section 705E shall contain a statement to the effect that &#8211;<\/p>\n<p>(a)each of the following conditions, in relation to a REIT or the principal company of a group REIT, as the case may be, is met throughout the specified accounting period, namely &#8211;<\/p>\n<p>(i)it is resident in the State and not resident in another territory,<\/p>\n<p>(ii)it is incorporated under the Companies Acts,<\/p>\n<p>(iii)its shares are listed on the main market of a recognised stock exchange in a Member State, and<\/p>\n<p>(iv)it is not a close company within the meaning of Chapter 1 of Part 13,<\/p>\n<p>and<\/p>\n<p>(b)each of the following conditions, in relation to a REIT or group REIT, as the case may be, is reasonably expected to be met at the end of the specified accounting period, namely &#8211;<\/p>\n<p>(i)at least 75 per cent of the aggregate income of the REIT or group REIT derives from carrying on property rental business,<\/p>\n<p>(ii)it conducts property rental business consisting of at least three properties, the market value of no one of which is more than 40 per cent of the total market value of the properties constituting the property rental business,<\/p>\n<p>(iii)it maintains a property financing costs ratio (within the meaning of section 705H(1)) of at least 1.25:1,<\/p>\n<p>(iv)at least 75 per cent of the aggregate market value of the assets of the REIT or group REIT relates to assets of the property rental business of the REIT or group REIT, as the case may be,<\/p>\n<p>(v)it ensures that the aggregate of the specified debt shall not exceed an amount equal to 50 per cent of the aggregate market value of the assets of the business or businesses of the REIT or group REIT, as the case may be, and<\/p>\n<p>(vi)subject to having sufficient distributable reserves, it distributes to the shareholders of the REIT or the shareholders of the principal company of the group REIT, as the case may be, at least 85 per cent of the property income for each accounting period of the REIT or group REIT, as the case may be, by way of property income dividend, on or before the specified return date for the accounting period in relation to the REIT, or the principal company of the group REIT, as the case may be.<\/p>\n<p>(2)Each of the conditions in subparagraphs (iii) and (iv) of subsection (1)(a) shall be regarded as having been met throughout the specified accounting period if that condition is met within the period of three years commencing on the date on which the compalate.dwtny or group becomes a REIT, or group REIT, as the case may be.<\/p>\n<p>(3)The condition in subparagraph (ii) of subsection (1)(b) shall be regarded as having been met at the end of the specified accounting period if that condition is met within the period of three years commencing on the date on which the company or group becomes a REIT, or group REIT, as the case may be.<\/p>\n<p>(4)Subparagraph (iv) of subsection (1)(a) shall not apply to a REIT or a group REIT, as the case may be, which is under the control of persons who are qualifying investors.<\/p>\n<p>705C. Conditions regarding shares.<br \/>\n(1)In this section &#8211;<\/p>\n<p>&#8216;ordinary shares&#8217; means shares other than preference shares;<\/p>\n<p>&#8216;preference shares&#8217; means shares which do not carry any right to dividends other than dividends at a rate per cent of the nominal value of the shares which is fixed, and which carry rights in respect of dividends and capital which are comparable with those general for fixed-dividend shares quoted on a stock exchange in the State.<\/p>\n<p>(2)Each share issued by a REIT or the principal company of a group REIT, as the case may be, shall either &#8211;<\/p>\n<p>(a)form part of its ordinary share capital, or<\/p>\n<p>(b)be a preference share with no voting rights attaching to it.<\/p>\n<p>(3)No more than one class of ordinary share shall be issued by a REIT or by the principal company of a group REIT, as the case may be.<\/p>\n<p>705D. Conditions regarding an accounting period.<br \/>\nSubject to subsections (2) and (3) of section 705B, where a notice has been given under section 705E by &#8211;<\/p>\n<p>(a)a company, all of the conditions in section 705B(1) must continue to be met by that company for each accounting period following the specified accounting period until a notice has been issued in accordance with section 705O,<\/p>\n<p>(b)a principal company in respect of a group, the conditions in section 705B(1)(a) must continue to be met by that principal company for each accounting period following the specified accounting period until a notice has been issued in accordance with section 705O, and<\/p>\n<p>(c)a principal company in respect of a group, the conditions in section 705B(1)(b) must continue to be met by that group for each accounting period following the specified accounting period until a notice has been issued in accordance with section 705O.<\/p>\n<p>705E. Notice to become a Real Estate Investment Trust.<br \/>\n(1)A company shall not be a REIT unless it gives a notice to the Revenue Commissioners under this section.<\/p>\n<p>(2)A group shall not be a group REIT unless a company (in this Part referred to as the &#8216;principal company&#8217;) which is a member of that group gives a notice to the Revenue Commissioners under this section.<\/p>\n<p>(3)<\/p>\n<p>(a)A notice under this section is a notice in writing specifying a date on or after 1 January 2013 &#8211;<\/p>\n<p>(i)from which the company is to be a REIT, or<\/p>\n<p>(ii)from which the group is to be a group REIT,<\/p>\n<p>being a date that is not earlier than the date of the notice given under subsection (1) or subsection (2), as the case may be, and<\/p>\n<p>(b)the notice shall, in the case of a group REIT, list all of the members of the group, to each of which the group REIT designation will apply.<\/p>\n<p>(3A)<\/p>\n<p>(a)Where at any time a company becomes a member of a group subsequent to the date of a notice given under subsection (2) by the principal company of that group, the principal company shall give an amended notice to the Revenue Commissioners within the period of 30 days after the date on which that company became a member of the group.<\/p>\n<p>(b)An amended notice under this section is a notice in writing &#8211;<\/p>\n<p>(i)specifying a date from which that company is to be a member of the group REIT, which date shall not be a date earlier than the date of the amended notice, and<\/p>\n<p>(ii)containing a statement that each of the conditions in paragraph (b) of section 705B(1) in relation to the group REIT is reasonably expected to be met at the end of the accounting period in which the principal company gives the amended notice.<\/p>\n<p>(c)An amended notice shall list all of the members of the group, to each of which the group REIT designation will apply.<\/p>\n<p>(d)Where the principal company does not, in accordance with this subsection, give to the Revenue Commissioners an amended notice, the provisions of section 705O shall apply as if the group REIT had given a notice under subsection (1) of that section specifying the date at the end of the period specified in paragraph (a) as the date from which it would cease to be a group REIT.<\/p>\n<p>(4)The date from which a company or group shall be a REIT or a group REIT, as the case may be, shall be the date &#8211;<\/p>\n<p>(a)on or after 1 January 2013, as specified in a notice under this section, and<\/p>\n<p>(b)from which the company or group, as the case may be, meets, or is regarded as having met, the conditions of section 705B.<\/p>\n<p>705F. Duration of Real Estate Investment Trust.<br \/>\nA company or group shall not be a REIT or a group REIT, as the case may be, after the date specified in a notice issued in accordance with section 705O to the company or group, as the case may be.<\/p>\n<p>705G. Charge to tax.<br \/>\n(1)Notwithstanding anything in the Acts, but subject to the provisions of this Part, a company which is a REIT or a member of a group REIT shall not be chargeable to tax in respect of &#8211;<\/p>\n<p>(a)income of its property rental business, or<\/p>\n<p>(b)chargeable gains accruing on the disposal of assets of that property rental business.<\/p>\n<p>(2)Where a company or group, which is, or which, subsequent to such acquisition, becomes, a REIT or group REIT, as the case may be, acquires an asset which is used, or subsequent to such acquisition is used, for the purposes of its property rental business, and following that acquisition &#8211;<\/p>\n<p>(a)the asset is developed, the cost of which development exceeds 30 per cent of the market value of the asset at the date of commencement of the development, and<\/p>\n<p>(b)the asset is disposed of within the period of three years beginning with the completion of the development,<\/p>\n<p>then, notwithstanding the provisions of subsection (1), the profits arising therefrom, computed in accordance with the Tax Acts, shall be chargeable to corporation tax at the rate specified in section 21A.<\/p>\n<p>(3)Notwithstanding Chapter 4 of Part 8, that Chapter shall apply to a deposit (within the meaning of that Chapter) to which a REIT or a member of a group REIT is for the time being entitled as if such deposit were not a relevant deposit within the meaning of that Chapter.<\/p>\n<p>705H. Profit: financing cost ratio.<br \/>\n(1)In this section &#8211;<\/p>\n<p>&#8216;property financing costs&#8217; means costs, being costs of debt finance or finance leases for the purposes of property rental business, which are taken into account in arriving at aggregate profits, including amounts in respect of &#8211;<\/p>\n<p>(a)interest, discounts, premiums, or net swap or hedging costs, and<\/p>\n<p>(b)fees or other expenses associated with raising debt finance or arranging finance leases;<\/p>\n<p>&#8216;property financing costs ratio&#8217; means the ratio of the sum of property income and property financing costs of a company or group to the property financing costs of the company or group, as the case may be.<\/p>\n<p>(2)This section applies to a REIT or a group REIT if the property financing costs ratio of the REIT or group REIT, as the case may be, is less than 1.25:1 for an accounting period.<\/p>\n<p>(3)<\/p>\n<p>(a)Subject to paragraph (b), the REIT or the principal company of the group REIT, as the case may be, shall be charged to corporation tax under Case IV of Schedule D for the accounting period in respect of the amount by which the property financing costs of the REIT or group REIT, as the case may be, would have to be reduced for the property financing costs ratio to equal 1.25:1 for that accounting period.<\/p>\n<p>(b)The amount mentioned in paragraph (a) shall not exceed 20 per cent of the property income of the REIT or group REIT, as the case may be.<\/p>\n<p>(4)No loss, deficit, expense or allowance may be set off against the first-mentioned amount in subsection (3)(a) in charging that amount to corporation tax.<\/p>\n<p>705HA. Profit: calculating profits available for distribution.<br \/>\n(1)This section applies to any amount taken into account by a REIT or group REIT, in computing its aggregate profits, in respect of any disbursement or expense, not being money wholly and exclusively laid out or expended for the purposes of the property rental business (referred to in this section as the &#8216;disallowed amount&#8217;).<\/p>\n<p>(2)The REIT or the principal company of the group REIT, as the case may be, shall be treated as receiving an amount of income equal to the disallowed amount.<\/p>\n<p>(3)The amount of income referred to in subsection (2) shall be chargeable to corporation tax under Case IV of Schedule D and shall be treated as income &#8211;<\/p>\n<p>(a)arising in the accounting period in which the disallowed amount was taken into account, and<\/p>\n<p>(b)against which no loss, deficit, expense or allowance may be set off.<\/p>\n<p>705I. Funds awaiting reinvestment.<br \/>\n(1)This section applies where &#8211;<\/p>\n<p>(a)a REIT or group REIT disposes of a property of its property rental business, or<\/p>\n<p>(b)a REIT or a principal company, in the case of a group REIT, raises cash from the issue of ordinary share capital,<\/p>\n<p>and the REIT or group REIT, as the case may be, holds the proceeds.<\/p>\n<p>(2)<\/p>\n<p>(a)Profits arising from the investment of such proceeds, other than in property for the property rental business, shall be treated as property profits during the period of 24 months commencing on &#8211;<\/p>\n<p>(i)date of disposal, where subsection (1)(a) applies, or<\/p>\n<p>(ii)date of issue of ordinary share capital, where subsection (1)(b) applies,<\/p>\n<p>and as not being property profits thereafter.<\/p>\n<p>(b)Any apportionment of profits for the purpose of paragraph (a) shall be made in accordance with section 4(6).<\/p>\n<p>(3)Where the proceeds are held at any time after the date on which the period referred to in subsection (2) ends, the proceeds are to be treated as being assets of the residual business after that date.<\/p>\n<p>705IA. Disposals and reinvestments.<br \/>\n(1)This section applies where a REIT or group REIT disposes of a property of its property rental business.<\/p>\n<p>(2)In this section &#8211;<\/p>\n<p>(a)subject to paragraph (b), &#8216;net proceeds&#8217;, in relation to the disposal of the property of the property rental business, means the full proceeds from such disposal as reduced by any amount used to repay, in whole or in part, specified debt to the extent that the specified debt being repaid was employed in the acquisition, enhancement or development of the property being disposed of;<\/p>\n<p>(b)where the reference to the expression &#8216;net proceeds&#8217; (in relation to such disposal) occurs for the purposes of subsection (3)(ii), that reference shall be deemed to be a reference to an amount that is equal to the net proceeds (in relation to such disposal) as that expression is to be construed by virtue of paragraph (a).<\/p>\n<p>(3)Where the net proceeds from the disposal of the property are not &#8211;<\/p>\n<p>(a)invested in the acquisition of a new property for use in the REIT&#8217;s or group REIT&#8217;s property rental business,<\/p>\n<p>(b)invested in the development or enhancement of a property held for use in the REIT&#8217;s or group REIT&#8217;sproperty rental business, or<\/p>\n<p>(c)distributed to the shareholders of the REIT or the shareholders of the principal company of the group REIT, as the case may be,<\/p>\n<p>before &#8211;<\/p>\n<p>(i)the expiry of the period referred to in section 705I(2) (in this subsection referred to as the &#8216;first-mentioned period&#8217;) or, if earlier than that expiry, the date specified in a notice given under subsection (1) or (4) of section 705O (in this subsection referred to as the &#8216;specified date&#8217;), or<\/p>\n<p>(ii)for the purposes of satisfying the condition specified in paragraph (a) or (b), the expiry of the period of 12 months beginning prior to the date of disposal of the property,<\/p>\n<p>then any amount not so invested or distributed shall, for the purposes of applying the condition specified in section 705B(1)(b)(vi) and for the purposes of section 705N(a), be treated as property income of the REIT or group REIT arising in the accounting period in which the first-mentioned period expires or the specified date falls.<\/p>\n<p>(4)Subsections (2) and (3) of section 172D, and subsection (4) of section 153, shall not apply to any distribution of the proceeds of a disposal referred to in subsection (1).<\/p>\n<p>705J. Taxation of shareholders.<br \/>\n(1)This section applies where a REIT or group REIT, as the case may be, pays a property income dividend.<\/p>\n<p>(2)Subject to subsection (3), a shareholder within the charge to corporation tax shall, notwithstanding any other provision of the Tax Acts, be chargeable to corporation tax under Case IV of Schedule D in respect of a distribution referred to in subsection (1).<\/p>\n<p>(3)A property income dividend, received by a company which is a member of a group REIT from a company which is a member of the same group REIT, shall not be chargeable to corporation tax and the property income dividend shall not be taken into account in computing income for corporation tax of the first-mentioned company.<\/p>\n<p>(4)Notwithstanding the provisions of subsection (2), and subject to subsection (3), a shareholder within the definition of &#8216;qualifying company&#8217; in section 110(1) shall be chargeable to corporation tax under Case III of Schedule D in respect of a distribution referred to in subsection (1).<\/p>\n<p>(5)Where, but for subsection (2) and section 129, a property income dividend would be income of a company which is income chargeable to tax under Case I of Schedule D, it shall be so chargeable notwithstanding those provisions.<\/p>\n<p>705K. Taxation of certain shareholders.<br \/>\n(1)In this section, and subject to subsection (2), &#8216;holder of excessive rights&#8217; means a person, other than a qualifying investor, who &#8211;<\/p>\n<p>(a)is beneficially entitled, directly or indirectly, to at least 10 per cent of the distribution referred to in section 705B(1)(b)(vi), or<\/p>\n<p>(b)is beneficially entitled to, or controls directly or indirectly &#8211;<\/p>\n<p>(i)at least 10 per cent of the share capital of, or voting rights in, the REIT, or<\/p>\n<p>(ii)in the case of a group REIT, to at least 10 per cent of the share capital of, or voting rights in, the principal company.<\/p>\n<p>(2)Where a shareholder becomes a holder of excessive rights in a company as a result of that company becoming a REIT or the principal company of a group REIT, then the provisions of subsection (3) will not apply for a period of three years commencing from the date specified by that company in accordance with section 705E(4).<\/p>\n<p>(3)Where a REIT or group REIT makes a distribution to a holder of excessive rights and the REIT or group REIT, as the case may be, has not taken reasonable steps to prevent the distribution to such a person being made, the REIT or the principal company of the group REIT, as the case may be, shall, notwithstanding the provisions of section 705G, be treated as receiving an amount of income equal to the amount of the distribution.<\/p>\n<p>(4)The amount of income referred to in subsection (3) shall be chargeable to corporation tax under Case IV of Schedule D and shall be treated as income &#8211;<\/p>\n<p>(a)arising in the accounting period in which the distribution is made, and<\/p>\n<p>(b)against which no loss, deficit, expense or allowance may be set off.<\/p>\n<p>705L. Transfer of assets.<br \/>\n(1)Where a company becomes a REIT, the assets of the company before it becomes a REIT shall be deemed, for the purposes of the Capital Gains Tax Acts, to have been &#8211;<\/p>\n<p>(a)sold by the company immediately before it becomes a REIT, and<\/p>\n<p>(b)reacquired by the company immediately on becoming a REIT,<\/p>\n<p>and such deemed sale and reacquisition shall be treated as being for a consideration equal to the market value of the assets on the date specified by the company, in accordance with section 705E(3)(a), in a notice under that section.<\/p>\n<p>(2)Where a group becomes a group REIT, the assets of each member of the group before it becomes a group REIT shall be deemed for the purposes of the Capital Gains Tax Acts, to have been &#8211;<\/p>\n<p>(a)sold by that member of the group immediately before the group becomes a group REIT, and<\/p>\n<p>(b)reacquired by that member of the group immediately on the group becoming a group REIT,<\/p>\n<p>and such deemed sale and reacquisition shall be treated as being for a consideration equal to the market value of the assets on the date specified by the principal company of the group, in accordance with section 705E(3)(a), in a notice under that section.<\/p>\n<p>(3)Where an asset of a REIT or group REIT which is used for the purposes of the property rental business of the REIT or group REIT, as the case may be, ceases to be used for such purposes and begins to be used for the purposes of the residual business of the REIT or group REIT, as the case may be, the asset shall be deemed for the purposes of the Capital Gains Tax Acts, to have been &#8211;<\/p>\n<p>(a)sold by the REIT, or the relevant member of the group REIT, as the case may be, for that property rental business, and<\/p>\n<p>(b)acquired by the REIT, or the relevant member of the group REIT, as the case may be, for that residual business,<\/p>\n<p>at the date on which it ceases to be so used.<\/p>\n<p>(4)The deemed sale and acquisition in subsection (3) shall be treated as being for a consideration equal to the market value of the asset at the date referred to in subsection (3). A gain accruing to the property rental business as a result of subsection (3) shall, notwithstanding the provisions of section 705G, be a chargeable gain for the purposes of the Capital Gains Tax Acts.<\/p>\n<p>(5)Where an asset of a REIT or group REIT which is used for the purposes of the residual business, ceases to be used for such purposes and begins to be used for the purposes of the property rental business, the asset shall be deemed for the purposes of the Capital Gains Tax Acts, to have been &#8211;<\/p>\n<p>(a)sold by the REIT, or the relevant member or members of the group REIT, as the case may be, for that residual business, and<\/p>\n<p>(b)acquired by the REIT, or the relevant member or members of the group REIT, as the case may be, for that property rental business,<\/p>\n<p>at the date on which it ceases to be so used, for a consideration equal to the market value of the asset on that date.<\/p>\n<p>705M. Annual statement to Revenue.<br \/>\n(1)Every REIT, or principal company in respect of a group REIT, shall, in respect of each accounting period, by 28 February in the year following the year in which the accounting period ends, make a statement to the Revenue Commissioners in electronic format approved by them, confirming that the conditions in section 705D have been met in relation to the REIT or group REIT, as the case may be, throughout the accounting period specified in the statement.<\/p>\n<p>(2)Where a REIT or principal company in respect of a group REIT, as the case may be, cannot make the statement referred to in subsection (1), it shall notify the authorised officer of the Revenue Commissioners and that notification shall &#8211;<\/p>\n<p>(a)state the date or dates on which the condition or conditions first ceased to be met and the date or dates (if any) on which the condition or conditions was or were met again,<\/p>\n<p>(b)give a description of the respects in which the condition or conditions was or were not met, and<\/p>\n<p>(c)give details of the steps (if any) taken to prevent a recurrence of the condition or conditions not being met.<\/p>\n<p>(3)Where a REIT, or principal company in respect of a group REIT &#8211;<\/p>\n<p>(a)within a reasonable time determined by the authorised officer, fails to secure that a condition referred to in subsection (2) is met, or<\/p>\n<p>(b)fails to make a statement required under subsection (1),<\/p>\n<p>then, the Revenue Commissioners may treat the REIT or group REIT, as the case may be, as having ceased to be a REIT or group REIT at the end of the accounting period immediately prior to the accounting period in which the failure to meet the condition, or make the statement required, began and may apply the provisions of section 705O.<\/p>\n<p>(4)Where a REIT, or principal company in respect of a group REIT &#8211;<\/p>\n<p>(a)makes an incorrect or incomplete statement under subsection (1), or<\/p>\n<p>(b)fails, without reasonable excuse, to make a statement under that subsection,<\/p>\n<p>then, the REIT, or principal company in respect of a group REIT, as the case may be, shall be liable to a penalty of \u20ac3,000. For the purposes of the recovery of a penalty under this subsection, section 1061 shall apply in the same manner as it applies for the purposes of the recovery of a penalty under any of the sections referred to in that section.<\/p>\n<p>705N. Breach of conditions regarding distributions.<br \/>\nWhere for an accounting period a REIT or group REIT does notcomply with the provisions of section 705B(1)(b)(vi) in respect of the requirement to distribute at least 85 per cent of its property income &#8211;<\/p>\n<p>(a)the REIT or the principal company of the group REIT, as the case may be, shall be charged to corporation tax under Case IV of Schedule D in respect of an amount calculated by subtracting the amount of property income distributed in respect of that accounting period from the amount equal to 85 per cent of the property income of that accounting period, and<\/p>\n<p>(b)no loss, deficit, expense or allowance may be set off against the first-mentioned amount in paragraph (a) in charging that amount to corporation tax,<\/p>\n<p>but, where a company is restricted from making a distribution by reason of any provision of the Companies Acts, regard shall be had to such restriction in determining the amount, if any, chargeable to tax by virtue of paragraph (a).<\/p>\n<p>705O. Cessation Notice.<br \/>\n(1)Subsection (2) shall apply if a REIT or group REIT gives a notice in writing to the Revenue Commissioners specifying a date from which it will cease to be a REIT or group REIT, as the case may be.<\/p>\n<p>(2)The company or group shall cease to be a REIT or group REIT, as the case may be, at the date specified in the notice referred to in subsection (1).<\/p>\n<p>(3)The specified date shall be a date on or after the date of the notice referred to in subsection (1).<\/p>\n<p>(4)In accordance with section 705M(3), the authorised officer may by written notice state that any company or group shall cease to be a REIT or group REIT, as the case may be.<\/p>\n<p>(5)The date the company or group ceases to be a REIT or group REIT, as the case may be, shall be a date specified by the authorised officer in the notice referred to in subsection (4).<\/p>\n<p>(6)A REIT aggrieved by a notice given to it by an authorised officer under subsection (4) may appeal the notice to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of that notice.<\/p>\n<p>(7)[deleted]<\/p>\n<p>705P. Effect of cessation.<br \/>\n(1)Where a notice is given under subsection (1) or (4) of section 705O, a company or group that has ceased to be a REIT or group REIT is to be treated for corporation tax purposes as having ceased, at the date specified in the notice, to be a REIT or group REIT, as the case may be.<\/p>\n<p>(2)Where &#8211;<\/p>\n<p>(a)a notice is given under subsection (1) or (4) of section 705O, and<\/p>\n<p>(b)at the time of the giving of that notice, not less than fifteen years have elapsed from the date the REIT or group REIT became such under section 705E(4),<\/p>\n<p>the assets of the REIT or group REIT shall be deemed to have been disposed of by the REIT or the members of the group REIT, as the case may be, immediately before the cessation date and reacquired by the post-cessation company or members of the group, as the case may be, immediately after the cessation date, at the market value on that cessation date.<\/p>\n<p>&nbsp;<\/p>\n<p>705Q. Anti-avoidance provision.<br \/>\n(1)This Part shall not apply to any transaction engaged in by, or on behalf of, a REIT or group REIT, or to which it is directly, or indirectly, a party unless the transaction has been undertaken for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.<\/p>\n<p>(2)Where appropriate, a reference in subsection (1) to a REIT or group REIT includes a reference to a company or a group before it has become, or after it has ceased to be, a REIT or group REIT and, in the case of a group REIT, a company before it has become, or after it has ceased to be, a member of the group REIT.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-21865\" data-postid=\"21865\" class=\"themify_builder_content themify_builder_content-21865 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>REITs The Finance Act 2013 provides for real estate investment trusts (REITs).\u00a0 They are companies with a diversified share ownership base whose shares can be purchased and sold.\u00a0 A REIT must be resident and incorporated in the state.\u00a0 The shares must be listed on a recognised stock exchange within the EU.\u00a0 It must not be [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[334],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/21865"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=21865"}],"version-history":[{"count":15,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/21865\/revisions"}],"predecessor-version":[{"id":34791,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/21865\/revisions\/34791"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=21865"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=21865"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=21865"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}