Taxation of Chargeable Gains Act 1992 section 59C

Alternative investment managers (2)

Section 59C sets the deemed consideration for capital gains purposes when a company partner in an alternative investment fund management partnership disposes of instruments to an individual partner as part of deferred variable remuneration arrangements.

• This section applies where an individual partner has allocated profit to the partnership representing variable remuneration that will vest in the form of instruments, and a company partner disposes of those instruments to the individual.
• The company partner must be one that would have been taxed on the allocated profit but for adjustments under the excess profit allocation rules for non-individual partners.
• Both the company and the individual partner are treated as if the instruments were acquired for a deemed consideration equal to the allocated profit, reduced by the income tax the partnership owes on that profit.
• This section mirrors the effect of section 59B but applies specifically where the disposing party is a company partner rather than the partnership itself holding the instruments as partnership assets.