Finance Act 2022

Payments of distributions etc to individual to whom the remittance basis applies

46 (1) This paragraph applies in relation to income or a chargeable gain arising to an individual in a tax year if—

(a) section 809B, 809D or 809E of ITA 2007 applies to the individual for that tax year,

(b) the income or gain arises as a result of—

(i) the payment of interest by a QAHC,

(ii) the making of a distribution or a qualified distribution by a QAHC, or

(iii) the disposal by the individual of shares in a QAHC,

(c) in the case of a payment of interest or the making of a distribution or qualified distribution, the individual provided investment management services in connection with investment arrangements to which the QAHC is party, and

(d) in the case of a disposal of shares, the shares were acquired by the individual during the course of the individual providing investment management services in relation to such arrangements.

(2) The foreign proportion of the amount of any such income is to be treated, for the purposes of income tax, as relevant foreign income.

(3) The foreign proportion of the amount of any such gain is to be treated, for the purposes of capital gains tax, as a gain accruing on the disposal of foreign assets.

(4) For the purposes of this paragraph, the “foreign proportion” of an amount of income or of a gain is equal to the proportion of the profits of the QAHC in the relevant period that was derived from foreign sources, apportioned on a just and reasonable basis in accordance with sub-paragraph (6).

(5) The “relevant period” means—

(a) where the QAHC has been a QAHC for at least three accounting periods, the three most recent complete accounting periods of the QAHC, or

(b) otherwise, the period beginning with beginning of the day on which the QAHC became a QAHC and ending with—

(i) where the income or chargeable gain arose to the individual on that day, the end of that day, or

(ii) otherwise, the end of the day before the income or chargeable gain arose to the individual.

(6) For the purposes of determining the proportion of profits of a QAHC that were derived from foreign sources in the relevant period—

(a) include any profits that would have arisen had the QAHC disposed of all of its assets for a consideration equal to the market value of the assets immediately before the end of the period, and

(b) whether profits are derived from foreign sources is to be determined by reference to the ultimate underlying income or assets to which the profits relate (so, for example, the extent to which profits arising from an interest in another company are derived from foreign sources depends on the extent to which the profits of that company are derived from income arising outside the United Kingdom or the disposal of assets outside the United Kingdom).

(7) In this paragraph—

• “foreign asset” has the meaning it has in Schedule 1 to TCGA 1992 (see paragraph 5 of that Schedule);

• “profits”, in relation to a company, means income and chargeable gains;

• “qualified distribution” has the meaning given by paragraph 45(5).