### Tax Clarity and Enhanced Disclosure for Sri Lankan Unit Trusts 📈

The Unit Trust Association of Sri Lanka (UTASL) has highlighted key provisions in the proposed Bill to amend the Inland Revenue Act, focusing on transparency and investor tax obligations. • Pass-Through Status: Unit Trusts will continue to be treated as pass-through vehicles for income tax, where income is taxed at the unit holder level. However, to maintain this status, trusts must now issue detailed income certifications to investors within five months of the assessment year-end. • Penalty for Non-Compliance: If a Unit Trust fails to provide the required certification (detailing income, exemptions, and withholding taxes), it will be treated as a company for income tax purposes, potentially increasing the tax burden. • Capital Gains Tax (CGT): Quoted Equities: Investments in listed equities held by Unit Trusts remain exempt from CGT under the broader framework. Other Assets: The UTASL expects CGT treatment for other asset classes to remain unchanged, provided the pass-through status is maintained. • Implementation Timeline: These requirements are expected to take effect from 1 April 2025. • Economic Impact: By formalizing disclosure, the amendments aim to improve good governance within the financial services sector and the capital markets, ensuring Unit Trusts remain a viable vehicle for long-term national investment.