Non-residents trading in the UK: through UK investment managers, brokers or Lloyd’s agents: the 20% rule: qualifying period of no more than 5 years: example
|Taxable income of non-resident||100||200||200||250||250|
|Entitlement of manager to above||32||58||40||35||5|
|Expressed as percentage of each year||32%||29%||20%||14%||2%|
|Average cumulative percentage over qualifying period||32%||30%||26%||22%||17%|
It may be assumed that the test is satisfied for year 1 because (a) in this example it was the manager’s intention to have a beneficial entitlement to an average of 20% or less in aggregate over a five year period and (b) that intention was fulfilled. Had the 20% beneficial entitlement been achieved before the five years were complete, then that shorter period would have been the qualifying period. A second qualifying period of up to five years could include years 2, 3, 4, 5 and 6 and so on.