The Client

Dutch and UK based private equity fund

 

The Problem

Significant legislative amendments to the UK treatment of Fund carried interest eroded the tax friendly treatment that had been available to UK employees. The changes were also designed to capture employees that were UK resident but non-domicile.

 

The Solution

  • With the law in a constant state of flux (with the amendments passing through Parliament at the time of advising), proposing a future proof solution was a real challenge;
  • All fund returns free from Dutch and UK taxation;
  • Non-resident investors subject to tax only in their jurisdiction of residence;
  • Carried interest would remain free from UK tax for the UK resident but non-domicile individuals;
  • Carried interest potentially taxable at the lower rate of UK capital gains tax;
  • A Fund and carry structure future proofed for anticipated legislative amendment.

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