Corporation Tax Act 2009 section 395

Investment trusts: profits or losses of a capital nature

Section 395 excludes capital profits and losses arising from loan relationships of investment trusts from the corporation tax loan relationships rules.

• Capital profits or losses from creditor relationships of an investment trust cannot be brought into account as credits or debits under the loan relationships rules in Part 5 of CTA 2009.
• Capital profits or losses are those recorded (or that should have been recorded) through the capital column of the income statement under the relevant Statement of Recommended Practice (SORP) for investment trusts.
• The applicable SORP is the one issued by the Association of Investment Trust Companies in January 2003, or any subsequent replacement SORP, as amended from time to time.
• The Treasury has the power to amend the definition of capital profits or losses by order where an investment trust prepares its accounts under international accounting standards.