Part 13Tax avoidance
F1CHAPTER 5FIncome-based carried interest
Direct lending funds
809FZQDirect lending funds
1
Carried interest arising from an investment scheme which is a direct lending fund is income-based carried interest in its entirety.
Subsections (2) to (4) apply for the purposes of this Chapter.
2
A direct lending fund is an investment scheme—
a
which is not a venture capital fund, significant equity stake fund, controlling equity stake fund or real estate fund, and
b
in relation to which it is reasonable to suppose that, when the scheme ceases to invest, a majority of the investments made for the purposes of the scheme (calculated by reference to value invested) will have been direct loans made by the scheme.
3
An investment scheme makes a direct loan if for the purposes of the scheme money is advanced at interest or for any other return determined by reference to the time value of money.
4
The acquisition of a direct loan is to be regarded as the making of a direct loan if the loan is acquired within the period of 120 days beginning with the day on which the money is first advanced.
Pt. 13 Ch. 5F inserted (with effect in accordance with s. 37(4) of the amending Act) by Finance Act 2016 (c. 24), s. 37(2)