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Investment trust definition

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

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