Income Tax (Trading and Other Income) Act 2005 section 386

Open-ended investment company dividend distributions

Section 386 sets out how amounts shown as available for distribution as dividends by an open-ended investment company are treated for income tax purposes.

• Where an OEIC's distribution accounts show amounts available for distribution to shareholders as dividends, those amounts are treated as dividends paid to the shareholders for income tax purposes.
• Each shareholder's deemed dividend is calculated in proportion to their shareholding relative to the total shares in the company.
• This treatment does not apply where the OEIC is an approved personal pension scheme.
• The amounts treated as dividends are charged to income tax under section 383, and the provisions on tax credits at sections 397 to 399 apply as appropriate.