Taxes Consolidation Act 1997 section 739C

Charge to tax

Section 739C provides that an investment undertaking is not chargeable to tax on its relevant profits, except as provided for under the investment undertaking regime, and exempts deposits held by the undertaking from deposit interest retention tax (DIRT).

• An investment undertaking is not subject to tax on its relevant profits other than as specifically provided for under the investment undertaking rules in Chapter 1A of Part 27.
• Relevant profits means the relevant income and relevant gains that accrue to the undertaking — these are instead taxed in the hands of the unitholders.
• Deposits held by an investment undertaking are exempt from DIRT, even though DIRT would normally apply to such deposits under the general deposit interest retention tax rules.
• The effect is to ensure that the tax charge arises at unitholder level rather than at fund level, preserving the "gross roll-up" nature of the investment undertaking regime.