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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
, see all updates

Investment trusts: general

This guidance deals with the position of shareholders in an investment trust on or after 6 April 1980. For guidance on the treatment of investment trusts themselves, see CG41400+.

An investment trust is a company. The normal Capital Gains Tax rules apply to shareholders in the company. SP2/99 allows taxpayers to claim a simplified method of computing indexation allowance if they invest in a monthly savings scheme operated by an approved investment trust. The basic principle is to treat all investments as made in the seventh month of the company’s accounting year.

NOTE. If a taxpayer is within the charge to Capital Gains Tax, neither indexation allowance nor taper relief apply to disposals of assets on or after 6 April 2008. Previously indexation allowance had been frozen at April 1998. Companies and other concerns within the charge to Corporation Tax are not affected by these changes. For indexation allowance see CG17207+ and for taper relief see CG17895+.

Further guidance on investment trusts can be found in SAIM6000+