Last Updated February 27, 2019

Law and Practice

Contributed By Travers Smith LLP

Authors



Travers Smith LLP investment funds group comprises four partners and 15 other dedicated fee earners, based in London. The group focuses on funds, investors and intermediaries in the private equity, infrastructure, debt, real estate and listed equities sectors. It has constantly been at the forefront of developing market practice and thought on relevant changes for the investment funds industry, including the European Alternative Investment Funds Managers Directive and, more recently, the potential impact of Brexit. The funds tax group advises on the structuring of investment funds to maximise their tax efficiency for investors and managers. The investment funds group sits alongside the firm’s market-leading private equity M&A practice, one of the largest transactional teams of private equity lawyers in the City. The funds finance practice combines expertise from the firm’s fund formation and finance practices to advise lenders that provide subscription line and other facilities to real estate funds. Travers Smith also advises real estate funds on the borrower side. The investment funds group is best known for private funds and closed-end listed funds.

The UK has one of the world's largest networks of double tax treaties. Whether or not a fund itself can benefit from protection against taxation under the terms of a treaty will depend on various factors, including the terms of the treaty itself and the particular circumstances of the fund. Tax opaque funds may be able to benefit from this protection (for example, an ITC may be able to rely on the terms of a double tax treaty to reduce or eliminate overseas withholding tax which would otherwise apply to dividends or interest it receives).

In relation to certain tax transparent funds, it may be possible for investors to benefit from treaty protection in relation to amounts received by the fund. Whether this protection is available will depend on a number of factors, including, the terms of the relevant treaty and the particular circumstances of the fund and relevant investor.

Generally, the UK does not tax non-resident investors on gains made from investments in UK funds or dividends received from these funds, other than in certain circumstances where the fund invests in UK real estate. In cases where the UK does potentially tax non-resident investors, it may be possible for an investor to rely on the provisions of a double tax treaty to reduce or eliminate this taxation, for example, in relation to withholding tax on a PID paid by a REIT. Whether or not relief is available will depend on a number of factors, including, the terms of the relevant treaty and the particular circumstances of the relevant investor.

Travers Smith LLP

10 Snow Hill
London
EC1A 2AL

+44 20 7295 3000

+44 20 7295 3500

david.patient@traverssmith.com www.traverssmith.com
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Authors



Travers Smith LLP investment funds group comprises four partners and 15 other dedicated fee earners, based in London. The group focuses on funds, investors and intermediaries in the private equity, infrastructure, debt, real estate and listed equities sectors. It has constantly been at the forefront of developing market practice and thought on relevant changes for the investment funds industry, including the European Alternative Investment Funds Managers Directive and, more recently, the potential impact of Brexit. The funds tax group advises on the structuring of investment funds to maximise their tax efficiency for investors and managers. The investment funds group sits alongside the firm’s market-leading private equity M&A practice, one of the largest transactional teams of private equity lawyers in the City. The funds finance practice combines expertise from the firm’s fund formation and finance practices to advise lenders that provide subscription line and other facilities to real estate funds. Travers Smith also advises real estate funds on the borrower side. The investment funds group is best known for private funds and closed-end listed funds.

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