IFM41020 - Remittance basis: qualifying conditions

FA22/SCH2/PARA46(1) sets out the conditions that an individual needs to meet in order to benefit from this treatment.

These conditions are that:

• the remittance basis applies to an individual for that tax year;
• the individual is an investment manager providing investment management services for an investment arrangement of which the QAHC is a part;
• the income or gain arising from the QAHC is a payment of interest, a distribution or qualified distribution, or disposal by the individual of shares in a QAHC;
• where there is a disposal of shares, the shares were acquired by the investment manager during the course of providing investment management services for an investment arrangement of which the QAHC is a part.

The remittance basis treatment is not limited only to individuals who are providing investment management services directly to the QAHC, although the interest in the QAHC still needs to be held directly by the individual.

It also applies to individuals who provide investment management services to other entities, provided that the services are connected with an investment arrangement to which the QAHC is a party.

For example, a limited partnership fund may have several QAHCs. An individual providing investment management services may receive a distribution based on the performance of all assets through that fund and rather than just the assets of the QAHC they were involved in. The QAHCs are connected and so the remittance basis treatment will apply to the full distribution.