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Where Taxpayers and Advisers Meet

Tax liability for company investments in funds

marc02
Posts: 89
Joined: Wed Apr 22, 2009 2:46 pm

Tax liability for company investments in funds

Postby marc02 » Wed Sep 26, 2018 6:32 pm

I am aware that when a company invests in a Investment Bond, that "loan relationship rules apply." See https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/corporate-owned-bonds/


Could someone tell me the tax situation where a company buys funds directly (not wrapped in a bond)? Eg an EFT or Investment Trust? In this case is it treated also as "loan relationship" rules or (a) are dividends received liable to Corporation Tax? (b) Is the growth or loss of the investment liable to CT while in the fund or only realised when the fund is sold?

Thanks

marc02
Posts: 89
Joined: Wed Apr 22, 2009 2:46 pm

Re: Tax liability for company investments in funds

Postby marc02 » Fri Sep 28, 2018 9:11 am

I think I have managed to answer this question, but happy for further comments.

The purchase of EFT or Unit Trusts etc using company cash would mean those investments are capital assets and when sold any gain would be against CT in the same class (eg a loss could not be offset against trading profits, but could be offset against other capital gains).


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