Corporation Tax Act 2010 section 614

Applicable corporation tax rate

Section 614 sets out the corporation tax rate that applies to open-ended investment companies (OEICs).

• OEICs do not pay corporation tax at the standard corporation tax rate; instead, they pay at the income tax basic rate.
• The applicable rate for any financial year is the basic rate of income tax for the tax year beginning on 6 April in that financial year.
• The small profits relief provisions (sections 18A and 18B of the Corporation Tax Act 2010) do not apply to OEICs.
• This ensures OEICs are taxed consistently in line with the income tax basic rate, reflecting their nature as collective investment vehicles.