Corporation Tax Act 2010 section 618

Applicable corporation tax rate

Section 618 sets out the special corporation tax rate that applies to authorised unit trusts.

• Authorised unit trusts do not pay corporation tax at the standard or main corporation tax rate; instead, they are taxed at a special rate.
• The applicable rate is the income tax basic rate in force for the tax year beginning on 6 April in the relevant financial year.
• The small profits relief provisions (sections 18A and 18B of the Corporation Tax Act 2010) do not apply to authorised unit trusts.
• This ensures authorised unit trusts are taxed consistently at the basic rate of income tax, reflecting their role as collective investment vehicles.