GREIT07025 - Breaches of conditions: Company Conditions 3 and 4 (listing condition and 'not close'): other breaches

Breach of Company Conditions 3 and 4 (shares listed on a recognised stock exchange and ‘not close’) result in automatic termination, apart from take-over by another UK-REIT and where the breach was a result of the action of others (see GREIT07015 and GREIT07020. Where these particular circumstances do not apply, the regime will generally cease to apply to the company with effect from the end of the accounting period before the one in which the breach occurred (regulation 4(2) SI 2006/2864).

Note that as with all the conditions, if HMRC thinks that a breach of Company Conditions 3 or 4 is an attempt by the company to obtain a tax advantage, they may give notice to the company to remove the company or the group from the UK-REIT regime. This is regardless of whether the limits for breaching any of the individual conditions, or the multiple breach limits have been reached.

The consequences of the issue of a termination notice by HMRC are dealt with at GREIT06025, and the date of termination may be different from the date that would apply in normal circumstances.