IFM36710 - Avoidance of double taxation: Introduction

 

Avoidance of Double Taxation

Introduction

ITA07/S809EZG(1)-(2)

The disguised investment management fees (DIMF) rules contain two separate provisions that exist to prevent double taxation.

It is possible that fees received could be charged to income tax as a result of the DIMF rules and another tax charge could arise, at the same time or later, on a payment which in effect arose from the same sum. This second charge may be to income tax or another tax. It may also be taxed on the individual manager or another person (IFM36730)

• The first provision (ITA07/S809EZG(1)) applies to give relief where a charge is made under the DIMF rules and a second possible tax charge also arises in relation to the disguised fee.
• The second provision (ITA07/S809EZG(2)) applies to give relief where a charge is made under the DIMF rules for a sum which has arisen to an individual by way of a loan or advance.

IFM36720 gives details of how to make adjustments if either of the two avoidance of double taxation provisions apply.