Introduction Background
3.Changes to the tax rules for investment trusts were introduced by Section 49 Finance Act 2011. In order to be treated as an investment trust for an accounting period, a company must be approved by HMRC and meet Conditions A to C in section 1158(2) of CTA 2010 throughout that period.
4.Condition A, as currently drafted, is that 'the business of the company consists of investing its funds in shares, land or other assets with the aim of spreading investment risk and giving members of the company the benefit of the results of the management of its funds'.
5.The amendment makes it clear that provided all, or substantially all, of the business of a company is investing its funds in shares, land or other assets with the aim of spreading investment risk then ancillary activities will not prevent Condition A from being satisfied.