Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Investment definition

What does Investment mean? In practice, investment describes an asset or bundle of rights committed in a host state with the aim of generating a return. In investor-state work, the operative definition is treaty-specific: most bilateral investment treaties (BITs) and the Energy Charter Treaty use broad, asset-based lists covering, where applicable, tangible and intangible property located in the territory, shareholdings and other equity interests, contractual rights (including concessions), intellectual property, and loans or claims to money, subject to stated carve-outs. The ICSID Convention does not define investment; tribunals assess jurisdiction by the treaty text and case law, commonly considering a contribution of resources,...

UK Investment Manager Exemption for Private Clients: Criteria, Trading Status, HMRC SP1/01, Investment Transactions, Treaty Interaction, and 2025–26 Updates on PE/IME Reform and Carried Interest

Published by a LexisNexis Private Client expert

Practice notes

STOP PRESS:

On 28 April 2025, the UK government released draft changes to domestic tax legislation to refresh the rules on permanent establishments (PE) and to update the Investment Manager Exemption (IME). Stemming from a 2023 consultation and wide-ranging dialogue with industry participants, the proposals acknowledge that elements of the UK’s PE and IME regimes—now more than two decades old—no longer align with the practicalities of today’s asset management landscape. Comments on the consultation are sought by 7 July 2025. For further details, see: Open consultation: Reform of UK law in relation to transfer pricing, permanent establishment and Diverted Profits Tax. The core aim of the investment manager exemption (IME) is to ensure a UK-based Investment Manager (IM) is not treated as a branch or agent of a non-resident Client when executing investment trades for that client. Absent the IME, where the client is an individual or a trust, that client could be liable to income tax and capital gains tax (CGT) on the resulting profits. The IME was first introduced by section 127 of the Finance Act 1995, has since been broadened, and is now set out in substantially similar terms in the...

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Web page updated on 22/05/2026

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