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HMRC internal manual

Trusts, Settlements and Estates Manual

From
HM Revenue & Customs
Updated
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Capital items that are income for tax purposes: profit on sale of certificate of deposit

ITTOIA/S551

Profits and gains on the sale of certificates of deposit are capital in trust law. But, they are treated as income for income tax purposes. For periods to 5 April 2006, they are not liable at the special trust rate even if the trustees are normally liable at that rate. For periods from 6 April 2006 they are liable at the special trust rate in both discretionary and non-discretionary trusts (ITA/Sections 481 and 482) but not in the case of unauthorised unit trusts, where they remain chargeable at basic rate.