Section 558 — Corporation Tax Act 2010: Demergers: disposal of asset

Demergers: disposal of asset 558 1 This section applies in the case of a company UK REIT if—

a the company (“C”) disposes of an asset involved in its property rental business to a 75% subsidiary (“S”) of C, b C (so far as it carries on residual business) disposes of its interest in S to another company (“P”),

c on the date when P acquires the interest in S, P gives a notice under section 523 specifying a date that falls within the post-disposal period, and d the group of which S is a member becomes a group UK REIT from the specified date. 2 “ The post-disposal period ” means the period of 6 months beginning with the date of the disposal of the asset by C.

3 P may give a notice under section 523 in accordance with subsection (1)(c) even if it does not expect to meet conditions C, E and F in section 528 throughout accounting period 1.

4 Sections 536 and 537 (effects of entry) ... do not apply to the group of which S is a member—

a in relation to the asset disposed of by C, or b in relation to business conducted by the exploitation of that asset.

5 Sections 555 and 556 (movement of assets out of ring fence) do not apply to the disposal of the asset by C.

6 But if, at the end of the post-disposal period, conditions C, E and F in section 528 are not met in relation to P, subsections (4) and (5) are to be treated as not having had effect.