IFM14532 - Summary

The regulations define two types of breach with regard to the ongoing requirements for investment trusts; ‘minor breaches’ and ‘serious breaches’.

The two types of breaches are discussed in more detail in the following pages. In summary:

• a ‘breach’ is a breach of one or more of the requirements of an investment trust company;
• a breach will be either a ‘minor’ breach (see IFM14534) or a ‘serious’ breach (see IFM14536);
• where a minor breach is discovered by the investment trust itself, and it is notified to HMRC and rectified as soon as reasonably practicable without any intervention by HMRC then it will not be regarded as a breach;
• minor breaches will not cause an investment trust to lose its approved status unless there are a specified number of minor breaches within a certain period (see IFM14540);
• an investment trust will only lose its approved status for serious breaches, which includes a specified number of minor breaches within a certain period (see IFM14540)