GREIT08008 – Distributions: 90% distribution requirement

A condition of remaining in the regime is that the company (principal company for a Group REIT) must pay out 90% of the income profits of the tax-exempt business of each accounting period by the CTSA filing date for that period. That mandatory 90% is treated as a PID.

If the company wants to distribute more to its shareholders, there are attribution rules to determine how much of any additional distribution is from profits of the tax-exempt business (and therefore payable as a PID under deduction of basic rate tax) or is out of profits that arose from taxable activities (and therefore treated as normal distributions with no requirement to deduct tax on payment). The attribution rules are set out in GREIT08010 onwards.