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Home / Simons-Taxes /Corporate tax /Part D7A Other special sectors /Division D7.11 Real estate investment trusts (REITs) /The REIT regime—implications for the company / D7.1115 Ring-fencing of tax-exempt business
Commentary

D7.1115 Ring-fencing of tax-exempt business

Corporate tax

Once a company enters the REIT regime there is effectively a 'ring fence' around the tax exempt property rental business carried on by a company. The ring fence is there to isolate the profits, losses and gains of the property rental business from those arising from other activities carried on by the company.

Accordingly, it is provided that, for the purposes of corporation tax, the business of the company UK REIT is treated as a separate business distinct from1:

  1. Ìý

    •ÌýÌýÌýÌý any business carried on by the pre-entry company

  2. Ìý

    •ÌýÌýÌýÌý any residual business of the company, and

  3. Ìý

    •ÌýÌýÌýÌý any business carried on by the post-cessation company

The tax-exempt property rental business is however one business and as such losses arising from

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