IFM14510 - Introduction

IFM14350 explains the circumstances in which an investment trust may cease to be treated as approved. In addition to a company simply no longer wishing to be treated as an investment trust, approval may cease because a company no longer meets all of the eligibility conditions at CTA10/S1158 or is in serious breach of the requirements of the regulations.

If a company that has been approved as an investment trust subsequently fails to meet one or more of the eligibility conditions then it will automatically cease to be treated as approved from the first day of the first accounting period in which one or more of the conditions is failed, as well as for all subsequent periods unless a successful application is made for approval from the start of a later accounting period in which the company once again meets all of the conditions.

A company that is approved as an investment trust which is in ‘serious breach’ of one or more of the requirements of the regulations (see IFM14536) will also cease to be treated as approved for the accounting period in which the first serious breach occurred, as well as all subsequent periods (again, unless a successful application is made for approval from the start of a later accounting period).

Breaches that are treated as ‘minor’ are subject to a proportionate approach that does not lead to automatic loss of approval unless there are a specified number of breaches within a specified period of time (see IFM14540).