Finance Act 2021

PART 3 Chapter 3 mismatches: Investment trusts

6 Chapter 3 of Part 6A of TIOPA is amended as follows.

7 In section 259CB (hybrid or otherwise impermissible deduction/non-inclusion mismatches and their extent)—

(a) after subsection (3) (as substituted by paragraph 3) insert—

“(3A) So far as the excess arises by reason of an interest distribution designation, it is to be taken not to arise by reason of the terms, or any other feature, of the financial instrument (whether or not it would have arisen by reason of the terms, or any other feature, of the financial instrument regardless of that designation).”, and

(b) in subsection (4), in the opening words, for “that and subsection” substitute “subsections (3), (3A) and”.

8 In section 259CC (interpretation of section 259CB), after subsection (3A) (as inserted by paragraph 4) insert—

“(3B) An “interest distribution designation” means a designation made under regulation 5(2) of the Investment Trusts (Dividends) (Optional Treatment as Interest Distributions) Regulations 2009 (S.I. 2009/2034).”