Corporation Tax Act 2010 section 1146

The independent investment manager conditions

Section 1146 sets out five conditions (A to E) that must all be met for a UK-based investment manager acting on behalf of a non-UK resident company to be treated as an independent agent, and therefore not create a permanent establishment for that company in the UK.

• The investment manager must be running an investment management services business, and the transaction must be carried out in the ordinary course of that business.
• The relationship between the investment manager and the non-UK resident company must, in its legal, financial and commercial characteristics, be one of independent businesses dealing at arm's length.
• The requirements of the 20% rule (set out in section 1147) must be satisfied.
• The remuneration the investment manager receives for the services must be no less than is customary for that class of business.