INTM269140 - Non-residents trading in the UK: through UK investment managers, brokers or Lloyd’s agents: the 20% rule calculation: an example: an opaque fund

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1. Consider each non-resident separately. Non-resident C has fund income of 75m.
2. 20% of fund income of 225m is 45m
3. The investment manager’s income, together with that of parties connected to him (non-resident C), totals 75m. (The 75m fees received by the investment manager are a cost before the fund income is calculated, rather than income, and are not taken into account for this purpose.) This exceeds the 20% limit of 45m so the exemption is not available in respect of the transactions that the investment manager carries out for non-resident C.
4. The 20% rule is not broken in respect of non-residents A and B as they are not connected to the investment manager.