HMRC targets UUTs in tax loophole purge

HMRC wants to stop UUTs being used to unfairly avoid tax, as part of the government's crackdown on tax avoidance promised in the 2011 March Budget. UUTs are collective investment schemes (CIS) created by deed in which the scheme property is held on trust for investors. Income from UUTs is regarded as the income of the trustees rather than the unit holders, and so is taxed accordingly at the basic rate from the trustees. Trustees then make "deemed distributions" to unit holders. This is where trustees pay out the income to unit holders minus the basic income tax. The trustees inf...