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MTT45140 | Particular entities and adjustments: Investment entities: The substance based income exclusion

From HM Revenue & Customs · Multinational Top-up Tax and Domestic Top-up Tax

The substance based income exclusion (SBIE) amount for investment entities is determined on an entity-by-entity basis, in accordance with section 221 of Finance (No.2) Act 2023.

For members other than investment entities, the substance based income exclusion is determined on a territory-by-territory basis.

Calculating the substance based income exclusion amount

The SBIE amount of an investment entity consists of:

  • a percentage of the eligible payroll costs of the entity, and

  • a percentage of the eligible tangible asset amount of the entity.

These amounts, and the percentage figure, are determined for investment entities in the same way as they are ordinarily (see MTT32000). The only difference is that the amount is calculated on an entity-by-entity basis.