Commentary

D7.332 Definition of an investment trust

Corporate tax
Corporate tax | Commentary

D7.332 Definition of an investment trust

Corporate tax | Commentary

Investment trusts

D7.332 Definition of an investment trust

For accounting periods beginning on or after 1 January 2012, the definition of an investment trust was simplified. The stated intention behind these changes is to remove unnecessary restrictions on a company's commercial activities, provide increased certainty for investors and provide a more flexible framework that prevents unintended tax advantages being gained through investing in an investment trust company while ensuring a proportionate approach for minor inadvertent breaches.

Conditions for approval by HMRC

For accounting periods beginning on or after 1 January 20121 a company is an investment trust if:

  1.  

    •     it meets conditions A to C (the 'eligibility conditions' — see below)

  2.  

    •     any conditions specified in regulations, and

  3.  

    •     is approved by HMRC

The eligibility conditions are as follows2:

  1.  

    (A)     all or substantially all, of the

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