GREIT13020 - Joint ventures: Joint Venture Look-Through Notice: requirements

Provided the venturing company and the joint venture company meet the necessary conditions, they can jointly give notice that they want the provisions in the Joint Venture regulations to apply. In the case of a Group REIT, the principal company must give the notice on behalf of the group.

Joint election required

In both cases, the notice must be signed by the company secretary or a director of the joint venture company (regulation 2(4) SI 2006/2866). This is to ensure that the joint venture company is aware of its obligation to meet the Entry Charge in relation to the UK-REIT’s interests in its assets, and of other constraints relating to conduct of its business.

Timing and duration

The notice must be given before the start of the first accounting period to which the ‘look- through’ treatment is to apply, and it must specify the accounting period from the beginning of which it to apply (regulation 2(3) and (4) SI 2006/2866). Elsewhere the regulations refer to the date the notice takes effect – this is the beginning of the accounting period specified as the first in the notice (and not the date the notice is given).

The notice continues in effect until the interests of the venturing company (or venturing group) falls below 40% (regulation 4 SI 2006/2866).

Multiple ventures and venturers

A Joint Venture Look-Through notice applies in respect only of the named venturing company and the named joint venture company. If the venturing company is involved in other joint ventures, a separate notice is required in respect of each of them, although the venturing company need prepare only one set of financial statements in respect of all of its joint ventures.

If there is another 40% shareholder, and that person is also UK-REIT, if they want ‘look- through’ treatment to apply in respect of their interest in the joint venture company, they need to give a separate notice.