The size and scope of credit funds has rapidly expanded over the last decade and they play a fundamental role in the international lending markets. As credit funds are invariably cross-border the OECD’s BEPS initiative has had a significant impact on their taxation. The resulting principal purpose test has required many credit funds to re-evaluate the risk of withholding tax being suffered and whether treaty benefits will remain available. The interest limitation rule and the hybrid mismatch rules have also impacted on credit fund structures involving intermediate holding companies and have prompted credit funds to adopt more unique and creative legal instruments and mechanics. Finally one of the main domestic concerns for UK credit funds is how the carried interest tax regime has changed in the UK over recent years. As a consequence of all the above the credit funds of today look and feel...
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The size and scope of credit funds has rapidly expanded over the last decade and they play a fundamental role in the international lending markets. As credit funds are invariably cross-border the OECD’s BEPS initiative has had a significant impact on their taxation. The resulting principal purpose test has required many credit funds to re-evaluate the risk of withholding tax being suffered and whether treaty benefits will remain available. The interest limitation rule and the hybrid mismatch rules have also impacted on credit fund structures involving intermediate holding companies and have prompted credit funds to adopt more unique and creative legal instruments and mechanics. Finally one of the main domestic concerns for UK credit funds is how the carried interest tax regime has changed in the UK over recent years. As a consequence of all the above the credit funds of today look and feel...
If you are not a subscriber, subscribe now to read this content.
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