SCHEDULES
SCHEDULE 25Loan relationships
Part 2Amendments of other enactments
The Taxes Act 1988
56Investment trusts
1
Section 842 is amended as follows.
2
In paragraph (a) of subsection (1) (income must be wholly or mainly eligible investment income)—
a
after “the company’s income” insert “
(as determined in accordance with subsection (1AB) below)
”
; and
b
after “eligible investment income” insert “
(as so determined)
”
.
3
In paragraph (e) of subsection (1) (company must not retain more than 15% of eligible investment income)—
a
for “more than” substitute “
an amount which is greater than
”
; and
b
after “eligible investment income” insert “
(determined in accordance with subsection (1AB) below)
”
.
4
After subsection (1AA) insert—
1AB
In determining for the purposes of paragraph (a) or (e) of subsection (1) above (and accordingly of subsection (2A)(b) below)—
a
the amount of a company’s income, or
b
the amount of income which a company derives from shares or securities,
the amounts to be brought into account under Chapter 2 of Part 4 of the Finance Act 1996 in respect of the company’s loan relationships shall be determined without reference to any debtor relationships of the company.