Section 554Q — Income Tax (Earnings and Pensions) Act 2003: Exclusions: income arising from earmarked sum or asset

Exclusions: income arising from earmarked sum or asset 554Q 1 This section applies if—

a a sum of money or asset (“sum or asset R”) is held by or on behalf of a person (“P”),

b income arises from sum or asset R, and c when the income arises, it—

i is received by or on behalf of P, and ii is the subject of a relevant step within section 554B taken by P.

2 Chapter 2 does not apply by reason of the relevant step mentioned in subsection (1)(c)(ii) if—

a before the income arises, sum or asset R was the subject of a relevant step within section 554B taken by P, b Chapter 2 applied by reason of the relevant step mentioned in paragraph (a) in respect of A's employment with B or would have so applied apart from this section or section 554R or any of sections 554H to 554M or section 554T, c immediately before the income arises, sum or asset R is still earmarked or otherwise held on the basis mentioned in section 554B(1)(a) or (b),

and d subsection (3) does not apply.

3 This subsection applies if it is reasonable to suppose that, taking into account the type of investments from which the income derives (directly or indirectly), in essence, the income represents a return from sum or asset R which exceeds the return which might be expected applying the assumption that all relevant connected persons are acting at arm's length of each other.

4 In subsection (3) “ relevant connected person ” means a person with a connection (direct or indirect) to the arrangement under which the income arises.