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To join and remain in the regime, a UK-REIT is required to meet the property rental business condition throughout each accounting period of the company or group (CTA2010/S527(2)(b) and (3)(b)). This means meeting both conditions A and B, or, alternatively, from 11 July 2023, condition C.

»Ê¹ÚÌåÓýappse conditions are set out in CTA2010/S529:

Condition A. »Ê¹ÚÌåÓýapp property business involves at least three qualifying properties (IFM22025),

and

Condition B. No single property represents more than 40% by value of the assets of the property rental business (IFM22035),

or

Condition C. »Ê¹ÚÌåÓýapp property rental business involves at least one property, which is a commercial property with a value of £20 million or more at any time from the relevant time (see IFM22043).

For these conditions, the CTA2010/S519 definition of 'property rental business' is used. For more detail on the definition and exclusions, see IFM21020Ìýonwards. Note that for UK-REIT purposes, the UK and overseas property businesses of a company are treated as being a single business.

For a Group REIT, the property rental businesses of all the members of the group are treated as being a single business (CTA210/S529(3)). Property rental business conditions A and B or condition C must be met by that single business. This means that each member of the group does not have to meet these conditions on their own.

»Ê¹ÚÌåÓýapp property rental business condition must be met “throughoutâ€� the entirety of an accounting period. If it is met only for part of a period, for example because a property is sold, the condition will be breached (see IFM27035 for examples).

»Ê¹ÚÌåÓýapp REIT must notify HMRC as soon as reasonably practical if the property rental business condition ceases to be met (CTA2010/S561). Failing to meet the property rental business condition does not result in automatic removal from the regime, provided the breach is minor. Repeated breaches or a serious breach of the property rental business condition may result in removal from the regime (see IFM27030)