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Sums arising from funds retained under the Alternative Investment Fund Managers Directive (AIFMD) (Directive 2011/61/EU)

To comply with requirements under the Alternative Investment Fund Managers Directive (AIFMD) a partnership which is an alternative investment fund manager may retain profits which have been allocated to a partner.

The partnership itself may pay tax on these sums under the provisions at ITTOIA05/S863H-S863K. These sums may be forfeited by the partner if, for example, performance hurdles are not met.

In such circumstances the initial allocation of funds does not give rise to a charge under the DIMF rules because, although the sums are allocated to a partner, the partner does not have access to them.  Consequently, the sums allocated have not ‘arisen� to the partner.

The sums allocated will arise at the point that the sums are made available to the partner. However, any sums which are taxed would not meet condition 3 (IFM36325).