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Background

This schedule is a master schedule and is automatically present when a REIT computation is created. The schedule is used for entry of additional permanent information relating to tax exempt business.

In addition, this schedule contains the various conditions that must be satisfied in order to enter into and remain within the REIT regime, the REIT status tests.

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Developing the schedule

In REIT Investment or REIT Trading files, this schedule is developed when the computation is created.

This schedule can also be developed from standard CT Investment and Trading computations, from the A schedule, Develop > Other > REIT information.

This schedule is part of a group of schedules relating to tax exempt property businesses.

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Completing the schedule

For the first relevant period, the user is required to enter some permanent details on the schedule. The information will be carried forward to subsequent periods. The details required are:

• Type of return form.
• Tax district number.
• UTR.
• REIT type.
• Whether venturing company or not.
• Percentage interest in group.
  

The REIT type selected will determine which REIT financial statement schedule can be developed in the file. Where "Principal member of REIT group" is selected, the Group financial statement will be available. The group financial statement section will be hidden in this file for a "Non-principal member of REIT group". The information will be completed in the file for the "Principal member of the REIT group". Where ?Single Company REIT? is selected, the Company financial statement will be available.

The remainder of the schedule is made up of tests for the statutory conditions laid down in legislation. The schedule has sections for the following tests:

• Company conditions
• Tax exempt business conditions
• Distributions
• Balance of business conditions
• Profit: Financing cost ratio
  

Some of the company conditions are static in nature, and will be rolled forward unchanged:

• The company is resident in the UK.
• The company is not an open-ended investment company.
• The company is listed on a recognised stock exchange.

The remaining conditions are period specific, and are either required for the CT600 tax exempt return form or for the REIT status tests. These details will not be rolled forward and include:

• Turnover relating to tax exempt business.
  
• Property values attributable to the REIT property business.
  
• Distributions treated as having been made.
  
• Profits per accounts.
  
• Financing costs attributable to the tax-exempt property business.

Where possible details used in the testing of the conditions are linked from elsewhere in the computations.

Where any of the REIT status tests fail, an error will be produced advising the details. Full details of these errors are included below.

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Standard sub-schedules

There are a series of standard sub-schedules relating to the information contained in this schedule:

Analysis of distributions
Charge in respect of distributions
Group financial statement
Company financial statement
Summary of asset values

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Carry forward

All permanent information will automatically be carried forward, to reiterate the details carried forward are: -

• Type of return form.
• Tax district number.
• UTR.
• REIT type.

All details can be amended if required.

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How to file the submission for a C (Tax- exempt) online

HMRC advice is that C (Tax- exempt) is not required to file a CT600 return. HMRC will not generate tax references for C (Tax- exempt) unless otherwise requested.

 
C (Tax- exempt) is unlikely to have to file a tax return, consequently we have not enabled online filing of two separate legal entities from within one file.

In the rare circumstance in which a return needs to be filed online by C (Tax- exempt) post 1 April 2011, the steps outlined below will need to be followed.

When might a company want to submit a tax return for C (Tax- exempt)?

If a claim for tax relief is being made by a C (Tax- exempt), HMRC will require a CT600 with the relevant boxes (e.g. land remediation relief tax credits) completed so that the claim can be processed.

What constitutes a valid submission for a C (Tax- exempt)?

A tax return submission package for a C (Tax- exempt) should contain:

• The CT600 in XML format

There is no requirement to include either a computation or accounts. As there is no PCTCT for C (Tax-exempt) businesses, HMRC advises that the reason provided for not attaching accounts/computation should be ?Not within scope of CT?.

How do you achieve a valid online submission?

1. Create a return only company file to use for the C (Tax- exempt)

2.Complete the permanent information section on P and set the Type of CT return form to REIT C ? tax exempt company.

3. Develop the CT600.

4. Process the entries required for the claim being made.

5. File online, selecting that no accounts are attached providing the reason "Not within scope of tax".

Note: currently a tax computation will still be attached in iXBRL format, it will be a blank computation. In future the option to select "No computation" and the reason "Not within scope of tax" will be enabled in the e-filing wizard.

Related errors

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