Navigating asset managers through the UK’s disguised investment management fee (DIMF) legislation – a specialist tax avoidance provision that targets anyone providing investment management services in the UK.
The DIMF legislation aims to ensure that fees are correctly charged to UK income tax where investment management services have been undertaken in the UK. The legislation applies to both management and performance fees and imposes an income tax charge on the deemed UK trading income of individuals, where untaxed fees are considered to ‘arise’ to the investment managers, irrespective of whether they physically receive the fees. Fees can also be deemed to ‘arise’ to people connected to the asset managers performing investment management services.
How we can help
- We can help investment managers navigate through the legislation and undertake a close factual examination of the relevant business structure and fee flows.
- Help asset managers identify if they are within the scope of the legislation, analyse possible interpretations of the rules, comment on any available defences and where relevant, quantify and advise on the risks and any potential tax liabilities.
- Guide managers through difficult tax investigations in relation to DIMF and liaise with HMRC on your behalf (or draft / review responses to HMRC as required) with the aim of reaching a fair outcome in an efficient manner.