Income Tax (Trading and Other Income) Act 2005 section 388

Interpretation of sections 386 and 387

Section 388 provides definitions of key terms used in sections 386 and 387, which deal with dividend distributions from open-ended investment companies (OEICs).

• Defines core terms including "distribution", "distribution accounts", "distribution period", and "accumulation share" for the purposes of the OEIC dividend distribution rules
• A "distribution" is broadly defined to include not only cash payments but also amounts reinvested on behalf of holders of accumulation shares, where income is periodically added to the capital value of the company's scheme property
• An "open-ended investment company" and "owner of shares" take their meanings from the authorised unit trust regime in the Income and Corporation Taxes Act 1988, as modified by the Open-ended Investment Companies (Tax) Regulations 1997
• The term "umbrella company" — meaning an OEIC structured as multiple sub-funds — is defined by reference to section 615 of the Corporation Tax Act 2010