Income Tax Act 2007 section 973

Income tax due in respect of distributions

Section 973 empowers the Treasury to make regulations for assessing, collecting and recovering income tax on distributions of property rental profits made by UK Real Estate Investment Trusts (REITs).

• The Treasury may make regulations covering assessment, collection and recovery of income tax on REIT property rental distributions where tax is or may become chargeable on those distributions.
• The section covers distributions by both single-company UK REITs (distributing their own property rental profits or gains) and group UK REITs (where the principal company distributes amounts shown in the group financial statement as property rental profits or gains of UK or non-UK group members).
• The term "distribution" has a special meaning for REIT purposes and includes share capital issued in lieu of a cash dividend, with the amount of such a distribution calculated in accordance with CTA 2010.
• "Gains" in this context includes chargeable gains, and references to profits of property rental business should be read in light of the rules on distributions from one UK REIT to another.