Income Tax Act 2007 section 823

Treatment of transactions where requirements of 20% rule not met

Section 823 deals with what happens to investment transaction income when a non-UK resident meets all the independent investment manager conditions except the 20% rule, ensuring that only the tainted portion of income loses its favourable tax treatment.

• Where all independent investment manager conditions are met except the 20% rule, the chapter still applies but only to a limited portion of the income.
• For non-UK resident individuals, the relief applies to so much of the transaction income as is not tainted by the investment manager's beneficial entitlement.
• For non-UK resident companies, the same principle applies to income derived from the transaction.
• Income is only excluded from relief where it is both relevant disregarded income and income to which the investment manager (or a connected person) has or has had a beneficial entitlement.