Non-residents trading in the UK: through UK investment managers, brokers or Lloyd’s agents: investment managers: the definition of "investment transaction"
The Investment Manager (Specified Transactions) Regulations of 2009 specify the types of transaction that are an ‘investment transaction’ for the purposes of ITA07/S827(2) and CTA10/S1150. The Regulations provide that an ‘investment transaction’ is any transaction:
- In stocks or shares;
- In a ‘relevant contract’ (see INTM269072);
- Which results in the non-resident becoming party to a ‘loan relationship’ or a ‘related transaction’ (see INTM269074);
- In units in a collective investment scheme (see INTM269076);
- In securities (see INTM269078);
- Consisting in the buying or selling of foreign currency; or
- In a carbon emission trading product (see INTM269079).
The Regulations came into force on 12 May 2009 and apply:
- for the tax year 2009-10 and subsequent tax years (for income tax), and
- in relation to accounting periods ending on or after 12 May 2009 (for corporation tax).
Although excluded from the usual requirement to be made by way of statutory instrument, and therefore not carrying an “SI” number, the Regulations are nevertheless secondary legislation with full statutory force. A copy of the Regulations can be viewed at: http://www.hmrc.gov.uk/legislation/invest-man-regs-09.pdf.
For tax years and accounting periods prior to those covered by the Regulations, an ‘investment transaction’ was defined as a transaction in:
- Futures contracts (excluding those relating to land);
- Options contracts (excluding those relating to land);
- The buying or selling of any foreign currency;
- The placing of money at interest;
- Securities of any description not already mentioned but excluding contracts relating to land.
This definition was extended by Statutory Instruments (SI2003/2172-3) with effect from 12 September 2003 to include financial swap transactions such as interest rate swaps, equity swaps, credit derivatives etc. and by Statutory Instruments (SI2007/963-964) with effect from 12 April 2007 to include carbon emission credits.
The Regulations which replaced these earlier provisions use different terminology and apply broader concepts in some areas, but all transactions which were included under the earlier provisions are covered by the Regulations and will continue to qualify as ‘investment transactions’.