705HA Profit: calculating profits available for distribution.

(1) This section applies to any amount taken into account by a REIT or group REIT, in computing its aggregate profits, in respect of any disbursement or expense, not being money wholly and exclusively laid

out or expended for the purposes of the property rental business (referred to in this section as the “disallowed amount” ).

(2) The REIT or the principal company of the group REIT, as the case may be, shall be treated as receiving an amount of income equal to the disallowed amount.

(3) The amount of income referred to in subsection (2) shall be chargeable to corporation tax under Case IV of Schedule D and shall be treated as income—

(a) arising in the accounting period in which the disallowed amount was taken into account, and

(b) against which no loss, deficit, expense or allowance may be set off.