Taxation (International and Other Provisions) Act 2010 section 358

Meaning of "relevant income-producing asset"

Section 358 defines what counts as a "relevant income-producing asset" for the purpose of determining whether certain arrangements are excluded from the definition of a mutual fund under section 357.

• An asset is a relevant income-producing asset if it generates income that would be subject to income tax if held directly by a UK-resident individual.
• An asset that is hedged is not a relevant income-producing asset, provided no income is expected to arise from the asset (taking account of the hedging) or from the hedging arrangements themselves.
• Cash awaiting investment is not a relevant income-producing asset, provided it is invested as soon as reasonably practicable in assets that are not themselves relevant income-producing assets.
• Any income earned on cash while it is awaiting investment must also be reinvested promptly in non-income-producing assets for the cash to remain outside the definition.