Taxation of Chargeable Gains Act 1992 section 103KH

Interpretation of Chapter 5

Section 103KH provides the definitions of key terms used throughout Chapter 5, which deals with the capital gains tax treatment of carried interest received by investment fund managers.

• All key definitions in Chapter 5 are imported from the Income Tax Act 2007 rules on disguised investment management fees, ensuring consistency between the income tax and capital gains tax regimes.
• "Arrangements" and "carried interest" take their meanings from the ITA 2007 provisions, with carried interest broadly being the performance-linked reward that fund managers receive over and above a standard management fee.
• "Investment scheme", "investment management services" and "external investor" also follow the ITA 2007 definitions, covering the fund structure, the services provided to it, and the third-party investors who put money into the fund.
• These provisions have applied to carried interest arising on or after 8 July 2015, unless the carried interest relates to a disposal of partnership assets that took place before that date.