Changes to dividend distributions to corporate investors and performance management fees on reported income
Wed 23 Nov 2016
The Government will take the opportunity to amend the existing legislation that apply to the tax treatment of dividend distributions to corporate investors in authorised investment funds. In addition, legislation will be amended to allow a consistent tax treatment of performance management fees between offshore and onshore funds.
The Government will amend the rules in draft secondary legislation which will update the rules to allow dividend distributions to corporate shareholders in a way that allows exempt investors such as pension funds to obtain credit for tax paid by authorised investment funds.
Where offshore funds are part of the reporting funds regime, UK investors pay tax on the reported income and capital gains tax when the shares are sold. Where the investment manager receives a performance fee which is based on the value of the fund, legislation will change such that the performance fee will be applied to reduce the capital gain, rather than reduce the reported income. This will make the treatment of the performance fee for offshore funds consistent with that of onshore funds.
For more information contact Stephen Brown (Stephen.j.brown@mazars.co.uk) Paul Clement (paul.clement@mazars.co.uk) or Ian Thomson (ian.thomson@mazars.co.uk)
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