The following Tax guidance note Produced in partnership with James McCredie and Alicia Thomas of Macfarlanes LLP provides comprehensive and up to date legal information covering:
Although there is no specific definition of the term ‘hedge fund’, there are a number of characteristics that might typically cause a fund to be classified as a hedge fund as opposed to any other sort of investment fund.
This Practice Note provides an overview of some of the key features of a hedge fund, which are helpful to bear in mind when it comes to structuring and considering the tax consequences for such a fund.
In essence, most hedge funds will have all (or most) of the following characteristics:
open-ended collective investment vehicle
seeking a total return for investors
taking ‘short’ positions
maximising leverage (ie borrowing), and
fee structure comprising:
a fixed management fee, and
a variable annual performance fee
This Practice Note explores these characteristics in turn.
The UK tax regime applying to hedge funds is explored in the following Practice Notes:
Taxation of hedge funds—structure of the hedge fund vehicle
Taxation of hedge funds—trading in the UK and the investment manager exemption (IME)
Management structure of hedge funds
Other issues in hedge funds
This Practice Note together with those listed above concentrate on the nature and structure of a hedge fund from a UK centric point of view. In particular, it has been assumed that the key individuals involved with the setting up and running of the fund (or at least
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234