Revenue Note for Guidance

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Revenue Note for Guidance

705B Conditions for notice under section 705E

Summary

This section sets out the conditions which must be met, throughout the accounting period in which the notice under section 705E is given, by a company or principal company on behalf of a group.

Details

(1)(a) The company or principal company of a group must—

  1. be resident in the State,
  2. be incorporated under the Companies Act,
  3. have its shares listed on the main market of a recognised stock exchange in a Member State,
  4. not be a close company.

(1)(b) The REIT or group REIT must expect at the end of the specified accounting period that—

  1. 75% of its aggregate income is from its property rental business,
  2. its property rental business will consist of at least three properties and the market value of no one property will exceed 40 per cent of the total market value of the properties,
  3. a ratio of 1.25:1 will be maintained between the financing costs and the income of the property rental business, (iv) 75% of the market value of the assets will belong to the property rental business,
  4. its borrowings will not exceed 50% of the market value of its assets,
  5. it will distribute at least 85% of its exempt rental income.

(2) Conditions (iii) and (iv) in subsection (1)(a) will be regarded as having been met throughout the specified accounting period if they are met within a period of three years from the date on which the company or group becomes a REIT or group REIT.

(3) Condition (ii) in subsection (1)(b) will be regarded as having been met at the end of the specified accounting period if it is met within a period of three years from the date on which the company or group becomes a REIT or group REIT.

(4) Condition (iv) in subsection (1)(a) does not apply to a REIT or group REIT which is controlled by institutional investors.

Relevant Date: Finance Act 2021