DTI set to ease rules on investment trust shares
Monday 16 March 1998
Ministers are considering changing a key obstacle in DTI regulations which block trusts from doing share buy-backs because they would lose their status as investment companies.
The decision to look at changing the law follows intensive lobbying by the trade body for investment trusts, the AITC. The AITC wants its members to be able to use buy-backs to narrow the discounts which exist between the price of an investment trust company's shares and the value of its assets.
Potential investors in investment trusts, including pension funds and insurance companies, have complained that discounts have grown quickly in the last four years as demand for shares in the trusts has dwindled. In 1994, the average discount was 3-4 per cent. Now, some investment trust companies are running discounts of up to 20 per cent.
Ian Sayers, taxation adviser to the AITC, said: "The DTI have given us a reasonable response and we are optimistic that they are going to take this forward. They are putting it to ministers and we hope to have the issue sorted by April 1999."
Investment trust companies which try share buy-backs risk losing their status as investment companies, which could distort their accounts and alter the company's dividend policy.
In contrast, Inland Revenue rules allow them to keep their status as investment trusts for tax purposes when they buy back shares, exempting the companies from capital gains tax.
- 1 What happens to your body when you give up sugar?
- 2 Licence fee: What is the BBC charge – and how will the changes affect you?
- 3 This is what the photographer has to say about the picture of a weasel riding a woodpecker
- 4 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Durham Free School: 'Creationism taught at' free school facing closure
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...