Commentary on Sections Overview Overview Section 395: Investment trusts: profits or losses of a capital nature
1204.This section excludes profits and losses of a capital nature on loan relationships from being taken into account by an investment trust. It is based on paragraph 1A of Schedule 10 to FA 1996 and the Investment Trusts and Venture Capital Trusts (Definition of Capital Profits, Gains or Losses) Order 2006 (SI 2006/1182). Before FA 1996 investment trusts were treated as exempt from profits arising on the disposal of investments and that position was preserved by the loan relationships regime.
1205.Subsections (2) and (3) rewrite article 3 of SI 2006/1182 rather than referring to the appropriate SI as does paragraph 1A(3).
1206.Subsection (5) allows orders to be made for “such incidental, supplemental, consequential and transitional provision and savings”. This is the standard formulation in this Act for the additional amendments that can be introduced under an order and regulation-making power. It is not considered a change in the law.