MTT45210 | Particular entities and adjustments: Investment entities: Domestic Top-up Tax

For wholly domestic groups and entities, an investment entity is an excluded entity for DTT purposes (see MTT10030).

For multinational groups, top-up amounts of investment entities are determined, but only brought into charge where there is a qualifying entity in the UK that is a standard member.

This is set out in sections 267 and 272(3A) (in particular, the supplement to section 193) and (9)-(11) of Finance (No.2) Act 2023.

Investment entities – multinational groups

For multinational groups, an investment entity is not a qualifying entity (see MTT10020), but is still treated as member of the group under DTT for the purposes of:

• determining its top-up amount, and whether that amount is to be attributed to another member of the group, and

• assessing whether the group meets the revenue threshold for DTT purposes (see MTT11030).

For any other purpose, including chargeability, an investment entity is treated under DTT as not being a member of a group.

Top-up amounts of investment entities attributed to standard members

The top-up amount (including additional top-up amounts) calculated for an investment entity is to be included in the total top-up amount for the standard members of the group, when determining the top-up amounts of those standard members for DTT purposes (see MTT31100).

This will apply where:

• the investment entity is located in the UK, and

• a standard member in the same group as the investment entity is located in the UK.

Where there are no standard members in the UK, top-up amounts of investment entities are not brought into charge.

Top-up amount of investment entities when standard members do not have top-up amounts

Where:

• the standard members do not have any top-up amounts or additional top-up amounts, and

• there is a total top-up amount as the result of amounts attributed from investment entities,

the total top-up amount will be divided evenly between the standard members of the group, in accordance with section 272(11) of the Act.