Income Tax (Trading and Other Income) Act 2005 section 389

Authorised unit trust dividend distributions

Section 389 sets out how distributions from authorised unit trusts are treated as dividend payments to unit holders for income tax purposes.

• Where an authorised unit trust's distribution accounts show amounts available for distribution as dividends, those amounts are treated for income tax purposes as dividends paid to unit holders
• Each unit holder's share of the dividend is calculated in proportion to their rights in the trust
• The dividends are treated as paid on shares by a UK resident company, because the trustees of an authorised unit trust are deemed to be a UK resident company under section 617 of the Corporation Tax Act 2010, with unit holders' rights treated as shares in that company
• These rules do not apply if the authorised unit trust is an approved personal pension scheme