Commentary

D8.183 Tax treatment of gains and income

Corporate tax
Corporate tax | Commentary

D8.183 Tax treatment of gains and income

Corporate tax | Commentary

D8.183 Tax treatment of gains and income

The provisions in this article apply from 6 April 2014, unless the UUT is a mixed trust (D8.186) in which case the provisions at D8.175 continue to apply.

An unauthorised unit trust (UUT) can either be an exempt unauthorised unit trust (EUUT), or a non-exempt unauthorised unit trust (NEUUT). The definitions are discussed in D8.181.

The regulations detail the tax treatment of the income and capital gains of an unauthorised unit trust as follows.

Capital gains

Exempt unauthorised unit trust

All gains accruing to an EUUT are not chargeable for the purposes of TCGA 19921.

There is no charge to tax on the trustees of an EUUT if there is a disposal of an interest in a non-reporting fund and the 'reporting condition' is met throughout its period of ownership. An EUUT satisfies the reporting condition where the trustees prepare computations of the reportable income of the non-reporting fund2 and include the excess of any reportable income over distributions received in the amount shown in the accounts of the EUUT as income available for distribution or for investment. Where the reporting condition would not be met for an interest in a non-reporting fund in relation to times before a date specified by the trustees but the trustees reasonably expect it will be met in relation to times

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