Income Tax Act 2007 section 820

Meaning of "qualifying period"

Section 820 defines the term "qualifying period" as used in the investment manager exemption rules, with separate definitions depending on whether the context involves an individual's transaction income or a non-UK resident company's transactions.

• For individuals, the qualifying period is either the tax year in which the transaction income is chargeable to income tax, or a period of up to five years covering two or more tax years including that year.
• For non-UK resident companies, the qualifying period is either the company's accounting period in which the transaction takes place, or a period of up to five years covering two or more complete accounting periods including that one.
• The distinction between tax years (for individuals) and accounting periods (for companies) reflects the different time frameworks that apply to each type of taxpayer.
• In both cases, the maximum qualifying period is five years, providing a window over which the 20% investment manager threshold test can be assessed.