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Funds tax

Funds tax

There have been many UK tax changes affecting investment funds formed in the UK and elsewhere over the last few years.

On the authorised funds side, these have included new experienced tax regimes for property authorised investment funds (PAIFs) and funds of alternative investment funds (FAIFs). In the closed-ended fund arena, there is a new and more liberal tax regime for investment trust companies, which followed the introduction of interest distributions in them.

There have also been a number of major UK tax changes affecting non-UK funds. The new UK definition of an offshore fund has affected the design of some offshore funds, while the changes to the UK's offshore funds regime has affected very many others.

The government is currently modernising the UK tax treatment of unauthorised UK unit trusts. On the international front, the government is introducing a new UK authorised fund structure, the tax transparent fund to enable both a new co-ownership fund and also a new authorised limited partnership) so that the UK can compete effectively with Luxembourg and Dublin-based tax-transparent funds. We have worked with the government on most of these initiatives. Currently we are involved "behind the scenes" with the unauthorised unit trust tax changes and discussions on seeding of property funds. We are providing both tax and more general legal assistance in the development of the new tax-transparent fund structures.

How the funds tax team can help

Our tax experience enables us to understand the needs and challenges of the funds/asset management industry in the UK, EU and elsewhere, and the commercial drivers of its players. The result is tax advice which is a pragmatic, integral and seamless part of our funds offering and ranges from tax-driven structuring of new types of UK and international funds invested in any class of assets for fund managers and their restructuring to advising on the tax implications for an investor investing through a particular fund. We draw on the experience and support of the national tax group when required.

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