IFM15100 - Investors within the charge to corporation tax

Investors within the charge to corporation tax: dividend distributions

Investors within the charge to corporation tax will be exempt from UK taxation on any dividend received from an investment trust.

There are separate rules for financial traders (see below).

Investors within the charge to corporation tax: interest distributions

Where an investor within the charge to corporation tax receives an interest distribution from an investment trust, the Corporation Tax Acts have effect as if the interest distribution were a loan relationship credit of that investor.

There are separate rules for financial traders (see below).

Investors within the charge to corporation tax: financial traders

For most purposes a financial trader is an entity carrying on a business which is a banking business, an insurance business or a business consisting wholly or in part of dealing in trading assets such that any profit on such assets would form part of the trading profits of that business.

Any dividend distribution or interest distribution received by an investor that is a financial trader within the charge to corporation tax is taxable as a receipt of a trade.

Investors within the charge to corporation tax: disposals

An investor within the charge to corporation tax is taxable on any capital gains on disposal of shares in an investment trust, subject to any possible exemptions.

There are separate rules for financial traders (see above).