GREIT11225 – Groups: entry to the regime: entry charge: companies joining a Group REIT

When a new company joins a group that is already a Group REIT, the new subsidiary pays an Entry Charge in the same way as a company that was a member of the group when the group joined the regime, as paragraph 10 Schedule 17 FA 2006 applies the group rules in paragraph 9(3) to companies that join an existing Group REIT. See GREIT11220 for details. The notional income arises to the residual part of the new group member on the day after it joins the group, since that marks the start of a new accounting period for the new member.

Although the legislation in section 112(5) allows group members to elect to pay their portion of the Entry Charge by instalments, this does not apply to companies that join an existing Group REIT. This is because the election to pay by instalments could not have accompanied the section 109 notice given by the principal company when the group originally joined the regime.