CFM14016 - Collective investment schemes: approved investment trusts and VCT: special provisions

ITCs and VCTs: special provisions

This guidance describes the post FA 2002 provisions for the taxation of loan relationships, derivative contracts and forex.

No transitional provisions were required as a result of the new legislation relating to the loan relationships of Investment Trust Companies (ITCs) and Venture Capital Trusts (VCTs).

FA96/SCH10/PARA1A replaces previous rules in FA96/SCH10/PARA1, which were supplemented, for ITCs only, by regulations in SI 2001/391. The regulations were considered to have broadly the same effect in relation to the treatment of capital profits and losses, including bad debts, which are commonly written off to capital reserves under the ITC SORP. However, the new rules simplify and clarify the treatment of capital.