HMRC published on 25 May 2011 draft regulations introducing a new regime for the taxation of investment trusts, to supplement the provisions in clauses 49 and 50 of the Finance Bill 2011. The draft regulations provide for:
- an approval process;
- the conditions to be met while approved; and
- a “white list” of transactions not treated as trading.
The detail of these regulations is largely unsurprising, however, reflecting the contents of the consultation and feedback. The new rules will be welcomed as they remove certain unattractive features of the current rules, such as the need to seek annual approval, and add attractive new features, such as a “white list” of non-trading transactions, which should, in turn, improve the attractiveness of investment trusts as investments.
Comments on the draft regulations are invited by 24 June 2011.
