Regulation 3 Conditions

The conditions are as follows.

• Condition 1

  The venturing company is carrying on a joint venture with another person.

• Condition 2

  The joint venture takes the form of a company.

• Condition 3

  The joint venture company is carrying on a property rental business as defined in section 104.

• Condition 4

  The venturing company is beneficially entitled to 40% or more of the profits available for distribution to equity holders in the joint venture company.

• Condition 5

  The venturing company is beneficially entitled to 40% or more of the assets of the joint venture company available to equity holders in the event of a winding up.

• Condition 6

  The property rental business carried on by the joint venture company does not involve property that would fall in accordance with generally accepted accounting practice to be described as owner-occupied.

• Condition 7

  The joint venture company would satisfy Conditions 1 and 2 in section 108 (conditions for balance of business) if references in that section to—

  1. (a)

     the “tax-exempt business” were references to the joint venture company’s property rental business, and

  2. (b)

     the “company” were references to the joint venture company.

For the purposes of Conditions 6 and 7, owner-occupied property includes property held by the joint venture company and occupied by the venturing company.