Income Tax Act 2007 section 821

Meaning of "relevant disregarded income"

Section 821 defines what counts as "relevant disregarded income" for a non-UK resident whose investment affairs are managed by a UK-based investment manager, and is used when applying the 20% rule under section 819.

• For non-UK resident individuals, relevant disregarded income is the total income over the qualifying period derived from investment transactions carried out by the investment manager on their behalf, where the independent investment manager conditions are met (ignoring the 20% rule).
• For non-UK resident companies, relevant disregarded income is the total income over the qualifying period derived from transactions carried out by the investment manager, where the manager does not constitute a permanent establishment of the company (again ignoring the 20% rule).
• Only income from investment transactions handled by the investment manager is counted — income from any other type of transaction is not included in this calculation.
• The 20% rule itself is deliberately set aside when identifying which transactions qualify, so that the full pool of eligible investment income can be measured before the rule is then applied to it.