Investment trusts: interest distributions: tax vouchers - alternative rules for providing tax information to recipients
Regulation 21(2) SI2009/2034 prescribes an alternative way in which recipients can be sent tax information in a written statement (tax voucher).
The alternative provision (which is optional) allows an investment trust (IT) or prospective investment trust (IT) to send to the recipient (by post or electronically) less detailed information that is ‘generic information’ that would ordinarily be sent on a tax voucher (see CTM47575), if the recipient is provided access to all the information that would be contained in the tax voucher by ‘electronic means’, or in the case where recipients may not be able to access this information electronically, is provided with an ‘alternative method’ to access the information. This is explained below in more detail.
Under regulation 21(2)(a) SI2009/2034 the generic information that must be sent to participants is as follows:
- the gross amount of the distribution made to the recipient,
- the number and class of shares held by the recipient in respect of which the distribution is made,
- the net amount of the distribution per share,
- whether any tax has been deducted or not,
- the date the distribution was made, and
- the percentage of the gross distribution attributable to the interest distribution and the percentage attributable to the dividend.
Note that (a) is the amount before the deduction of any tax but is not inclusive of any dividend tax credit. (See the example at CTM47585.)
Access to an electronic means of information
Where generic information is sent by the IT or PIT to its recipient, under regulation 21(2)(a) SI2009/2034, the IT or PIT must provide access to an electronic means that should contain all the information required to complete a written statement set out in ICTA88/S234A (6) or (7) (see CTM47575).
The regulation is not prescriptive about the format this electronic means should take but an example of fulfilling this requirement would be where recipients were directed to the IT or PIT’s website and a web calculator, which on inputting the generic information, would calculate the more specific information as shown below:
- the amount of the dividend and or interest paid
- the rate and the amount of any income tax deducted from the interest paid
- the net amount of interest paid, and
- the amount of the tax credit to which a person is entitled in respect of the dividend, or to which a person would be so entitled if he had the right to a tax credit in respect of the dividend.
to ensure that the recipient had electronic access to all the information that would otherwise have been contained in a written statement as set out in ICTA88/S234A (6) or (7) (see CTM47575).
It would be preferable for the electronic access to the information above to be as informative as possible and in particular to show clearly the entries to be made on an income tax return. For an example of the information that should be made accessible electronically and the type of information that could be shown to help an UK individual recipient complete their tax return see CTM47585.
Access to an alternative method of information
Under regulation 21(2)(c) SI2009/2034 the IT or PIT must provide an alternative method of accessing information for recipients who cannot access information electronically (perhaps because they have no internet access). Again, this is not prescribed for in the regulations but an example of satisfying this alternative method might be a customer information telephone line where this additional information was sent in writing on request.