UK:
Amendments To Offshore Fund Rules To Reflect Finance Act 2014 AIFM Partnership Tax Changes
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Regulations amending the Offshore Funds Regulations 2009 (the
2009 Regulations) to reflect the Finance Act 2014
changes to the taxation of alternative investment fund managers
operating as partnerships (AIFM firms) were made
on July 21 and have effect for disposals made on or after August
12, 2014. The changes to the taxation of AIFM firms permit
AIFM firms to elect for all or part of a partner's
"relevant restricted profit" to be allocated to the AIFM
firm rather than from part of the partner's profit share.
Accordingly, the partner is not subject to tax on the profit.
Instead, the AIFM is treated as a partner in the AIFM firm and is
subject to income tax at the additional rate (currently 45 percent)
on the allocated amount. The partner is subsequently subject
to tax on the amount that vests, but will receive a tax credit for
the tax paid by the AIFM firm. Regulations.
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.
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