Textual Amendments
F1Ss. 23I-23R and cross-heading inserted (for the tax year 2026-27 and subsequent tax years (but in relation to investment management services whenever performed)) by Finance Act 2026 (c. 11), s. 58(2)(6)
(1)An individual who is treated as carrying on a trade for a tax year under section 23I is treated as carrying on the trade—
(a)wholly in the United Kingdom, if all of the applicable workdays are UK workdays;
(b)wholly outside the United Kingdom, if all of the applicable workdays are not UK workdays;
(c)otherwise, partly in the United Kingdom and partly outside the United Kingdom.
(2)Where the trade is treated as carried on partly in the United Kingdom and partly outside the United Kingdom, the amount to be treated as the profits arising from the part of the trade treated as carried on in the United Kingdom is the sum of the non-qualifying profits of that part of the trade and 72.5% of the qualifying profits of that part of the trade.
(3)In subsection (2)—
(a)the amount of the non-qualifying profits of the part of the trade treated as carried on in the United Kingdom is the proportion of the non-qualifying profits of the trade (determined in accordance with section 23I(3)(a)) that is the same as the proportion of the applicable workdays that are UK workdays (but see subsection (4));
(b)the amount of the qualifying profits of the part of the trade treated as carried on in the United Kingdom is the proportion of the qualifying profits of the trade (determined in accordance with section 23I(3)(b)) that is the same as the proportion of the applicable workdays that are UK workdays (but see subsection (5)).
(4)For the purposes of subsection (3)(a) in a case where—
(a)the individual is a non-UK resident for the tax year, and
(b)any of the non-qualifying profits of the trade are anticipated qualifying profits,
any UK workday in a non-UK tax year is not to be treated as a UK workday (but remains an applicable workday) for the purposes of determining the proportion of the anticipated qualifying profits that is an amount of non-qualifying profits of the part of the trade treated as carried on in the United Kingdom.
(5)For the purposes of subsection (3)(b) in a case where the individual is a non-UK resident for the tax year, the following days are not to be treated as UK workdays (but remain applicable workdays)—
(a)any UK workday prior to 30 October 2024;
(b)any UK workday in a non-UK tax year;
(c)any UK workday prior to a period of 3 or more non-UK tax years.
(6)For the purposes of this section—
(a)a day is an “applicable workday” if it is a day in the relevant period on which the individual performs any investment management services directly or indirectly in respect of an investment scheme (whether or not under the arrangements mentioned in section 23I(1)(a));
(b)a day is a “UK workday” if it is a day in the relevant period on which the individual spends more than 3 hours performing any investment management services directly or indirectly in respect of an investment scheme (whether or not under those arrangements) in the United Kingdom;
(c)a year is a “non-UK tax year” if the individual is a non-UK resident for the tax year and there are fewer than 60 UK workdays in the year;
(d)non-qualifying profits are “anticipated qualifying profits” if, on the first UK workday in the relevant period, it was reasonable to assume that they would be qualifying profits.
(7)For the purposes of subsection (6) the “relevant period” is the period—
(a)beginning with the later of—
(i)the day on which the first external investor was admitted to any scheme from which the individual is entitled to carried interest under the arrangements mentioned in section 23I(1)(a), and
(ii)the first day on which the individual performs any investment management services directly or indirectly in respect of an investment scheme under the arrangements;
(b)ending with the earlier of—
(i)the last day in the tax year for which the individual was treated as carrying on the trade under section 23I on which a sum of carried interest arose to the individual from an investment scheme under the arrangements for the purposes of that section, and
(ii)the last day on which the individual performed any investment management services directly or indirectly in respect of an investment scheme under the arrangements.
(8)For the purposes of subsection (6)—
(a)investment management services performed by an individual in the course of travelling to or from the United Kingdom by air or sea or via a tunnel under the sea are assumed to be performed overseas even during the part of the journey in or over the United Kingdom, and
(b)travelling to or from the United Kingdom is taken to—
(i)begin when the individual boards the aircraft, ship or train that is bound for a destination in the United Kingdom or (as the case may be) overseas, and
(ii)end when the individual disembarks from that aircraft, ship or train.]