SolvedINTM269070 | Non-residents trading in the UK: through UK investment managers, brokers or Lloyd’s agents: investment managers: the definition of "investment transaction"
From HM Revenue & Customs · International Manual
For chargeable periods beginning prior to 1 January 2026
The Investment Transactions (Tax) Regulations 2014, as applied and modified by the Investment Manager (Investment Transactions) Regulations 2014 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;
In a carbon emission trading product (see INTM269079);
In rights under a life insurance policy.
The regulations came into force on 8 April 2014 and have effect in relation to transactions entered into on or after that date. The regulations replaced the Investment Manager (Specified Transactions) Regulations 2009 which had effect 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).
Designated cryptoassets have been added to the type of transactions that are an “investment transaction” for the purposes of both ITA07/s827(2) and CTA10/s1150 by virtue of The Investment Manager (Investment Transactions) (Cryptoassets) Regulations 2022. The regulations for designated cryptoassets came into force on 1 January 2023 and have effect for transactions entered into:
during accounting periods which were current on the date the regulations were made which was 19 December 2022 and subsequent accounting period for corporation tax, and
during the 2022-2023 tax year and subsequent years for income tax
Copies of the regulations can accessed through the links below
Although excluded from the usual requirement to be made by way of statutory instrument, and therefore not carrying an “SI” number, the Investment Manager (Investment Transactions) Regulations 2014 are nevertheless secondary legislation with full statutory force.
For chargeable periods beginning on or after 1 January 2026
ITA07/S827(2) and CTA10/1150 no longer refer to The Investment Transactions (Tax) Regulations 2014 to define an investment transaction. Instead, rather than listing what is covered, the new legislation focuses on excluded transactions. The excluded transactions are those relating to UK land and physical commodities, both of which were excluded from the previous definition.
This change was intended make it easier for the legislation to adapt to developments in the asset management sector, such as the addition of cryptoassets to the regime in 2022, which required additional regulations at the time, but which would have been encompassed by the wording of the new statute had that been in place at the time.
Transactions in UK land, including transactions of any nature which result in the acquisition of land, are not within the definition of investment transactions. Further, futures or options contracts relating to UK land are specifically excluded unless the contracts operate by reference to a ‘qualifying index’. A qualifying index is one which is:
publicly available
comprised of a significant number of properties
maintained by persons not connected with the non-resident or its investment manager
Transactions in physical commodities, including warrants on the London Metal Exchange which give the holder title to the metal, are not investment transactions for the purposes of the exemption. However, futures and options contracts in commodities that provide for physical delivery will not be treated as having an excluded subject matter provided physical delivery does not occur. Similarly, contracts that operate by reference to a qualifying index are brought back into the exemption. Accordingly, in respect to transactions in UK land, this definition ensures that the qualifying index is not maintained by persons not connected with the non-resident or investment manager, and that such an index is not capable of being manipulated, for example, by being linked to specific properties.