New investment trust framework
HMRC have published detailed draft guidance relevant to investment trust companies. This guidance explains the new optional tax framework that allows investment trust companies who invest in interest bearing assets to benefit from a tax deduction for any interest distributions made. This new framework will effectively remove any corporate tax liability that would have arisen on interest and other similar income.
The tax liability will effectively move directly to the tax investor who will be treated as though the income from the investment trust had been received directly from an investment in the underlying assets of the trust.
The draft guidance is open for consultation until 16 October 2009 and any comments should be sent by email to the following address:firstname.lastname@example.org.