The UCITS IV Directive means that for the first time master funds can be based in the UK and feeder funds from other domiciles can hold units in those UK master funds. The new rules, enabling UK master funds to be tax transparent, will make them a very attractive option for feeder funds across the EU because of the UK’s extensive double taxation treaty network. This is a major advantage of the UK’s, which is too often understated.
Also, the UK has a robust governance regime for retail funds. For example, it prohibits a fund manager and a depositary being in the same group of companies. This robustness is also attractive to exempt institutional investors, such as pension funds and charities, which would most benefit from the UK’s double tax treaties.
Julie Patterson, IMA Director of Authorised Funds and Tax, said:
“TTFs will positively reinforce the UK’s reputation as a leading financial centre, ensuring we can capitalise on the opportunities UCITS IV presents.
“We look forward to the introduction of UK TTFs this year.”