Northern Trust welcome UK tax law
02 April 2012 London
Image: Shutterstock
Northern Trust’s custody and fund administration services are ready for the launch of the new UK authorised tax transparent fund (TTF) vehicle, due to be effective around August 2012.
First announced in the 2010 UK Budget, the UK tax transparent fund will enable fund managers and institutional investors to pool their assets to achieve cost and administrative efficiencies through withholding tax treaties that exist between countries in which investors are based, and those in which they invest.
It is being established to ensure the UK can compete with fund jurisdictions already offering tax transparent fund structures, such as Ireland, Luxembourg and The Netherlands, and becomes the location of choice for master feeder structures under UCITS IV.
“In order for the master-feeder provisions in UCITS IV to be attractive to investors on a cross-border basis, the master fund needs to be a tax-transparent vehicle,” said Aaron Overy, business development, asset pooling and retirement solutions at Northern Trust.
“We believe the introduction of a tax transparent fund in the UK would become the natural choice for asset managers already operating large UK fund ranges as well as support UK pension funds wishing to pool all their assets in the UK, and helping life insurance companies mitigate the effects of the Solvency II directive.”
“In addition, we would expect interest from Europe, Asia and US-based asset managers looking to operate a central platform in the UK for their global fund distribution needs,” he added.
First announced in the 2010 UK Budget, the UK tax transparent fund will enable fund managers and institutional investors to pool their assets to achieve cost and administrative efficiencies through withholding tax treaties that exist between countries in which investors are based, and those in which they invest.
It is being established to ensure the UK can compete with fund jurisdictions already offering tax transparent fund structures, such as Ireland, Luxembourg and The Netherlands, and becomes the location of choice for master feeder structures under UCITS IV.
“In order for the master-feeder provisions in UCITS IV to be attractive to investors on a cross-border basis, the master fund needs to be a tax-transparent vehicle,” said Aaron Overy, business development, asset pooling and retirement solutions at Northern Trust.
“We believe the introduction of a tax transparent fund in the UK would become the natural choice for asset managers already operating large UK fund ranges as well as support UK pension funds wishing to pool all their assets in the UK, and helping life insurance companies mitigate the effects of the Solvency II directive.”
“In addition, we would expect interest from Europe, Asia and US-based asset managers looking to operate a central platform in the UK for their global fund distribution needs,” he added.
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