Taxation of international private equity funds—offshore fund structuring
Produced in partnership with Ceinwen Rees and Penny Van den Brande of Macfarlanes LLP
Taxation of international private equity funds—offshore fund structuring

The following Tax practice note produced in partnership with Ceinwen Rees and Penny Van den Brande of Macfarlanes LLP provides comprehensive and up to date legal information covering:

  • Taxation of international private equity funds—offshore fund structuring
  • What are the key UK tax drivers behind an offshore private equity fund structure?
  • Example of a typical offshore fund structure with UK elements
  • Tax transparency at the fund level
  • Permanent establishment risk for the fund and investors
  • Offshore manager with an onshore adviser
  • Transfer pricing
  • VAT risk
  • Effect of salaried member rules
  • FATCA
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Tax?

This Practice Note provides an introduction to the structuring considerations relevant to a typical offshore private equity fund with some UK connection. The note deals with issues arising in both completely offshore structures and those that combine both onshore and offshore elements.

Given the potential scope of this note, it is restricted to the UK tax consequences of such structuring, and focuses on typical arrangements involving European-based and US-based funds. This Practice Note does not deal with regulatory matters.

It will be helpful to read this note in conjunction with the Practice Note on onshore fund structuring: Taxation of private equity funds—how is a fund structured? and also: Private equity funds—overview.

For details of how investors in a typical private equity fund are taxed on their share of the fund's profits, see Practice Note: How are investors in a private equity fund taxed on

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