Section 553 — Corporation Tax Act 2010: Meaning of “holder of excessive rights” and “excluded holder”

Meaning of “holder of excessive rights” and “excluded holder” 553 1 For the purposes of section 551 “ holder of excessive rights ” means a person who meets—

a condition A, and b either condition B or C. ...

2 Condition A is that the person—

a is beneficially entitled (directly or indirectly) to at least 10% of the distributions paid by the distributor, b is beneficially entitled (directly or indirectly) to at least 10% of the distributor's share capital, or c controls (directly or indirectly) at least 10% of the voting rights in the distributor.

3 Condition B is that the person is a company.

4 Condition C is that—

a the person is treated as a body corporate for tax purposes—

i in accordance with the law of a territory outside the United Kingdom with which arrangements have been entered into to provide relief from double taxation, or ii in accordance with an international agreement containing such arrangements, and b those arrangements have effect by virtue of an Order in Council under section 2 of TIOPA 2010. 4A For the purposes of section 551, a holder of excessive rights is an “excluded holder” if—

a in accordance with double taxation arrangements (within the meaning of section 2(4) of TIOPA 2010), the holder is taxed at a particular rate, or not taxed at all, on distributions from a UK REIT, unless the sole reason for that treatment is the size of the holder’s interest in the UK REIT, or b the holder is a person to whom a payment of a distribution must be made without deduction of income tax in accordance with regulation 7 of the Real Estate Investment Trusts (Assessment and Recovery of Tax) Regulations 2006 ( S.I. 2006/2867 ) (gross payment of distributions).

5 In subsection (2) “ the distributor ” has the meaning given by section 551(2).