Income Tax Act 2007 section 818

The independent investment manager conditions

Section 818 sets out the five conditions that must all be satisfied for an investment transaction carried out by a UK-based investment manager on behalf of a non-UK resident to qualify as meeting the "independent investment manager conditions".

• The investment manager must be running a genuine investment management services business at the time of the transaction, 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 must, when assessed by its legal, financial and commercial characteristics, be one of independent businesses dealing with each other at arm's length.
• The requirements of the 20% rule (set out in section 819) must be met in relation to the transaction.
• The remuneration the investment manager receives for the transaction must be at least as much as is customary for that class of business — in other words, it must reflect a normal market rate.