UK-domiciled investment trusts have been granted greater flexibility in paying out dividends, with vehicles now able to distribute capital profits as income for the first time.
New tax rules set out in the Finance Bill, which came into force at the start of this year, have given investment companies the option of redistributing capital gains into income. The rule change puts UK-based trusts on an even keel with offshore closed-ended vehicles and VCTs, both of which can boost income through capital growth. Ian Sayers, the director general of the Association of Investment Companies (AIC), said the rule change could transform the landscape of the UK equity income sector. “The rule could potentially change UK equity income trusts’ remits as, naturally, if the...
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