Commentary on Sections Overview Overview Section 824: Application of 20% rule to collective investment schemes
2438.This section modifies the 20% rule where the non‑UK resident is a participant in a collective investment scheme. It is based on section 127(9), (10) and (11) of FA 1995 and paragraph 5 of Schedule 26 to FA 2003, which are substantively the same.
2439.This section applies at the level of the scheme itself, treating it as if it were a non‑UK resident company, see subsection (3).
2440.Subsection (4) applies to a scheme which, if it was assumed to be a non‑UK resident company, would not be regarded as carrying on a trade in the United Kingdom. The 20% rule is treated as satisfied in relation to such a scheme.
2441.Subsection (5) applies to a scheme which, if it was assumed to be a non‑UK resident company, would be regarded as carrying on a trade in the United Kingdom. The 20% rule applies to such a scheme with the modifications in subsection (6).
2442.The definition of “the appropriate relevant period” in subsection (7) links into the meaning of “qualifying period” given by section 820. The reference to the term “transaction income” in paragraph (a) of that definition follows from the reference to that term in section 820(2)(a). See the commentary on section 820(2).