IFM37250 - Charging Provisions: Exclusions

Exclusions

As carried interest is defined for tax purposes by reference to the disguised investment management fees (DIMF) rules (IFM36520 and IFM36540), the carried interest rules do not apply to items which are treated as investment management fees by ITA07/S809EZA. Furthermore, TCGA92/S103KA(4) makes express provision that these rules do not apply to carried interest to the extent the carried interest is brought into account in calculating the profits of an individual’s trade, profession or vocation for the purposes of income tax.

Any repayment of a genuine co-investment in the fund or of an arm’s length return on that co-investment will not be caught by the carried interest rules. Such payments or returns must be of a kind, and on terms, comparable to those available to external investors.