Paragraph 32 Carried interest which ceases to be conditionally qualifying carried interestF1

(1)

Carried interest which is conditionally qualifying carried interest ceases to be conditionally qualifying carried interest at whichever is the earliest of—

(a)

the time when the investment scheme is wound up;

(b)

the end of the period of four years beginning with the time the scheme ceases to invest;

(c)

the end of the period of—

(i)

four years beginning with the day on which the sum of carried interest arises to the individual, or

(ii)

ten years beginning with that day if the carried interest was calculated on the realisation model;

(d)

the end of the period of four years beginning with the end of the period by reference to which the amount of the carried interest is determined;

(e)

the time at which Condition B in paragraph 31(4) ceases to be met.

(2)

Carried interest which ceases to be conditionally qualifying carried interest is to be treated as arising to the individual at the time when the carried interest ceases to be conditionally qualifying carried interest (but in relation to the same investments) to the extent that, had it in fact arisen to the individual at that time (but in relation to the same relevant investments), it would not have been qualifying carried interest.

(3)

Carried interest which is conditionally exempt from income tax by virtue of section 809FZS of ITA 2007 when this paragraph comes into force is to be treated as if it were conditionally qualifying carried interest for the purposes of this paragraph.

(4)

Any amount paid by way of income tax or capital gains tax in respect of carried interest to which paragraph 31 applies is to be treated as if it had been paid in respect of any income tax liability arising under sub-paragraph (2).

Annotations

Textual amendments

F1: Sch. A1 inserted (for the tax year 2026-27 and subsequent tax years (but in relation to investment management services whenever performed)) by Finance Act 2026 (c. 11), s. 58(6), Sch. 11 para. 1