A group for UK-REIT purposes can include non-resident companies,
so long as the companies meet the 75%/ effective 51% subsidiary
requirement (see
GREIT11025). The only company that
must be UK resident is the principal company.
The activities of the world-wide group are looked at for the
Tax-exempt business Conditions and for the Balance of business
Conditions (see
GREIT12005. and
GREIT12010). It does not matter where
the companies are resident nor where their property is located.
The UK-REIT legislation divides this world-wide group into
two parts, called G (property rental business) and G (residual).
The first includes the world-wide property rental business of the
group. The second covers all the other group activities.
Once these conditions have been met, the focus of the regime
reduces to the parts of the group over which the UK has primary
taxing rights. This is called the 'UK business' of the group. This
includes all the activities of UK resident members of the group,
together with those activities carried on the UK by non-resident
members of the group.
GREIT11105 and
GREIT11110 look at how the rules of
the regime apply to these non-resident members of the group: i.e.
those that have a taxable presence in the UK. The legislation is
set out in paragraph 32 Schedule 17 FA 2006. All other non-resident
subsidiaries are not covered by the regime: for example, their
property rental income is not included in working out the amount
out of which 90% must be distributed by the principal company under
deduction of basic rate tax (the Distribution Condition).
