An investment trust is a company domiciled in the UK. (see Investment Company )
Investment trusts must:
- invest in shares, land or other assets with the aim of spreading investment risk,
- the company’s shares must be admitted to trading on a regulated market and
- it cannot be a Venture Capital Trust or a Real Estate Investment Trust (as these types of companies are covered by other rules).
Additionally:
- the company cannot be a “close company” – that is to say that at least 35% of the voting shares must be held by the public
- the company must distribute the majority of its income and not retain any more than 15% of it (the old rules said the maximum retention was 15% of income from shares and securities) – there’s a minimum income threshold of £30,000 below which the company does not have to bother making a distribution.
- the company has to notify changes of investment policy to HMRC