D7.339 Income and distributions of investment trusts
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 at D4.1232) that are carried out by an investment trust are treated as non-trading transactions3. These regulations4 provide a consolidated 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.
Distributions and investment trusts
Regulations5 provide an option for an investment trust company to treat its dividends as payments of interest (referred to as 'interest distributions'). Such amounts are treated for the purposes of the Tax Acts as if the amount paid out is not a distribution and the recipient is taxed on the basis of receiving a payment of interest6.
These interest distributions
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