Finance Act 2003

3 (1) In relation to an investment transaction carried out on behalf of a non-resident company by a person providing investment management services (an “investment manager”), the investment manager is regarded as an agent of independent status acting in the ordinary course of his business if, and only if, the following conditions are met. U.K.

(2) The conditions are—

(a) that at the time of the transaction he is carrying on a business of providing investment management services;

(b) that the transaction is carried out in the ordinary course of that business;

(c) that he acts on behalf of the non-resident company in relation to the transaction in an independent capacity;

(d) that the requirements of the 20% rule are met (see paragraph 4);

(e) that the remuneration he receives in respect of the transaction for the provision to the non-resident company of investment management services is not less than is customary for that class of business; and

(f) that he does not fall to be treated as a permanent establishment of the company in relation to any other transaction carried out in the same accounting period.

(3) In sub-paragraph (1) “investment transaction” means—

(a) transactions in shares, stock, futures contracts, options contracts or securities of any description not mentioned in this paragraph, but excluding futures contracts or options contracts relating to land,

(b) transactions consisting in the buying or selling of any foreign currency or in the placing of money at interest, and

(c) such other transactions as the Treasury may by regulations designate for the purposes of this Schedule.

Regulations for the purposes of paragraph (c) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of the House of Commons.

(4) For the purposes of sub-paragraph (3) a contract is not prevented from being a futures contract or an options contract by the fact that any party is or may be entitled to receive or liable to make, or entitled to receive and liable to make, only a payment of a sum (as opposed to a transfer of assets other than money) in full settlement of all obligations.