As of 1 April 2022, the UK has introduced a new regime for the taxation of qualifying asset holding companies (QAHCs). This has been designed to enhance interest towards the UK as a location for asset management and the funds industry.
The new measure was first introduced in the 2020 March Budget, which was followed by the publication of draft legislation on 20 July 2021.
Who is eligible?
In order to be eligible for the new regime, QAHCs must meet certain criteria:
- Be UK tax resident
- Not be a UK REIT
- Be owned at least at 70% by institutional investors
- The main activity must be carrying on an investment business. Any other activities carried on must be ancillary to that main business and must not be carried on to a substantial extent
- The investment strategy must not involve the acquisition of listed equity securities.
What are the benefits?
This regime includes a series of new key tax features:
- QAHCs are completely exempted for gains on disposals of certain shares and overseas property
- QAHCs repurchasing their share capital from an individual can treat the premiums paid as capital rather than income distributions
- QAHCs are not subject to withholding tax when paying interest
- QAHCs are exempted from stamp duty and stamp duty reserve tax (SDRT) in the case of a repurchase of share and loan capital it has previously issued
- QAHCs activities are ring-fenced between qualifying and non-qualifying activities.
When enrolling in the scheme, the QAHC will enter a new accounting period and its previous accounting period will end.
How can TMF Group help?
TMF UK can manage and coordinate your corporate requirements and stakeholder relationships, allowing your business to focus on its core business strategy. Our services include incorporation, domiciliation, provision of directors, corporate secretarial services, accounting, tax, regulatory reporting and compliance services.
From a global perspective, TMF Group's services for real estate funds include AIFM, fund administration, depositary services, global investment structure services, asset servicing, and tax and regulatory reporting. We have a network of 9,100 in-house local experts, covering 85-plus jurisdictions across 120 offices.
Need more information? Explore our fund services or make an enquiry with us.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
