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UK funds regime review

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The government has published a call for input in relation to its review of the UK funds regime. The call for input sets out the scope and objectives of the review, which was announced in the 2020 Budget and invites stakeholders to provide views on which reforms should be taken forward and how they should be prioritised.

The call for input, which closes on 20 April 2021, is wide-ranging, covering direct and indirect tax and relevant areas of funds regulation, to reflect the fact that decisions made at firm and fund level are taken by reference to the overall commercial, tax and regulatory environment for funds. It also considers broader issues important to the success of the regime such as the roles of industry and government to make the UK regime a global success, e.g. through trade promotion.

In particular from a tax perspective, the call for input considers:

  • the tax neutrality principle;
  •  barriers and complexity within the current real estate investment trust (REIT) rules; and
  • cases where the UK approach to VAT on fund management services can create incentives for the domicile of funds outside of the UK.

The government says the call for input will build on the significant pre-existing body of work, through extensive engagement with a wide range of stakeholders on some of the specific policy proposals that have already been put to the government. It will also consider new ideas that stakeholders wish to put forward.

The call for input follows a consultation on the tax treatment of asset holding companies in alternative fund structures. The government published its response to this consultation together with a second stage consultation in December 2020, closing on 23 February 2021.

The government has also committed to reviewing the VAT treatment of fund management fees and plans to take this forward in 2021.

Issue: 1517
Categories: News