Income Tax Act 2007

[F1 809FZC Average holding period U.K.

(1) The average holding period of an investment scheme, in relation to a sum of carried interest, is the average length of time for which relevant investments have been held for the purposes of the scheme.

(2) In this section, “relevant investments” means investments—

(a) which are made for the purposes of the scheme, and

(b) by reference to which the carried interest is calculated.

(3) The average holding period is calculated by reference to the time the carried interest arises.

(4) It is calculated as follows.

• Step 1 For each relevant investment, multiply the value invested at the time the investment was made by the length of time for which the investment has been held.

• Step 2 Add together the amounts produced under step 1 in respect of all relevant investments.

• Step 3 Divide the amount produced under step 2 by the total value invested in all relevant investments.

(5) Disregard intermediate holdings or intermediate holding structures (including intermediate investment schemes) by or through which investments are made or held—

(a) when identifying, for the purpose of determining the average holding period of an investment scheme, what relevant investments are held for the purposes of an investment scheme, and

(b) for any other purpose relating to the determination of the average holding period.

This is subject to the following provisions of this Chapter.

(6) In this section, references to the length of time for which a relevant investment has been held are—

(a) in the case of an investment which has been disposed of before the carried interest arises, references to the time for which it was held before being disposed of, and

(b) in any other case, references to the time for which it has been held up to the time the carried interest arises.

(7) For the purposes of this Chapter, carried interest which is deferred carried interest in relation to a person within the meaning of section 103KG of TCGA 1992 is to be treated as arising to that person at the time it would have arisen had it not been deferred as specified in section 103KG(3)(a) or (b) of that Act.

(8) Sections 809FZD to 809FZP apply for the purposes of determining the average holding period of an investment scheme.]

Textual Amendments

F1 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)