[co-author: Alastair Ahamed]
The UK government has moved a step closer to introducing a new and advantaged tax regime for UK asset-holding companies (“
AHCs”) for investment funds. On July 20, 2021 it published a policy paper and draft legislation providing for the implementation of certain features of this proposed new regime.
The proposals are part of a drive to encourage fund managers to increase their use of UK AHCs in their fund structures and enhance the UK’s position as an asset-holding jurisdiction of choice for private investment funds. In order to achieve this the UK government’s proposal is aimed at removing obstacles for UK AHCs that are not present in jurisdictions where AHCs are commonly located and to ensure that little or no tax leakage arises at the level of a UK AHC such that the tax paid by a UK AHC is proportionate to the activity it undertakes.
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