Recent US tax law changes will have a significant impact on UK funds and their investors. The new rules include a new withholding regime which may subject a UK fund to 30% withholding on its US source income if it does not enter into an agreement with the IRS to provide information about its US investors. In addition, US investors will now be subject to new reporting requirements which may increase the information that the investors will want to receive from UK funds. Other new rules may affect the tax consequences of UK funds engaging in swaps or other contractual arrangements that correspond to dividends paid by US corporations or of holding unregistered US debt.
