Paragraph 5 Co-investment returns not “carried interest”F1

A sum which arises to an individual from an investment scheme under arrangements by way of profit-related return is not to be treated as “carried interest” to the extent that it constitutes a co-investment repayment or return.

In sub-paragraph (1)—

• “co-investment”, in relation to an individual and a scheme, means an investment made directly or indirectly by the individual, or a person who is connected with the individual, in the scheme, where there is no return on the investment which is not an arm's length return within the meaning of section 809EZB(2) of ITA 2007;

• “co-investment repayment or return” means a repayment in whole or in part of, or a return on, a co-investment.

Section 993 of ITA 2007 (meaning of “connected”) applies for the purposes of this paragraph but as if—