D7.339 Income and distributions

Corporate tax
Corporate tax | Commentary

D7.339 Income and distributions

Corporate tax | Commentary

Investment trusts—Tax treatment

D7.339 Income and distributions

Income receipts

Income arising to a company which is approved as an investment trust (see D7.332) is within the charge to corporation tax in the usual manner. However any realised capital gains are not subject to tax1.

Certain investment transactions (as defined, in regulations, from 8 April 2014, at D4.1232) that are carried out by an investment trust are treated as non-trading transactions3. These regulations4 provide a consolidated 'white list' of investment transactions for the purposes of authorised investment funds, exempt unauthorised unit trusts, investment trust companies and for calculating reportable income from an offshore reporting fund. The previous separate regulations that applied are repealed so that the specification of 'investment transactions' appears in one set of regulations only.

Prior to 8 April 2014 the investment transactions that were treated as non-trading transactions were:


    (a)     any transaction in stocks and shares


    (b)     any transaction in a relevant contract5


    (c)     any transaction which results in an investment trust becoming a party to a loan relationship or a related transaction in respect of a loan relationship6


    (d)     any transaction in units in a collective investment scheme7


    (e)     any transaction in securities of any description not falling within paragraphs (a) to (d)


    (f)     any transaction consisting in the buying or selling of any foreign currency; or


    (g)     any transaction in a carbon emission trading product8

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