Hedge funds

Hedge funds

What is a hedge fund?

There is no specific definition of the term ‘hedge fund’. Rather, the label ‘hedge fund’ represents a sort of catch-all for funds that don't sit neatly into any other category of collective investment (eg authorised investment funds or private equity funds). Hedge funds do, however, tend to share certain identifiable characteristics that distinguish them from other kinds of investment fund. At their most basic, they are forms of collective investment that seek to offset the risks inherent in one investment by purchasing another investment that is considered likely to move in the opposite direction.

Most hedge funds will share all (or most) of the following characteristics:

•
open-ended collective investment vehicles—they assume structures that allow investors to request that their investment in the common pool of assets can be redeemed at (almost) any time
•
seeking a total return for investors—they will invest in both long and short positions in stock and other securities with the aim of ensuring that the fund as a whole is hedged against whole-market movement
•
generally opportunistic in strategy—they seek to take advantage of market fluctuations

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Tax News

FTT rules on the VAT treatment of locum medical practitioners (Isle of Wight NHS Trust v HMRC)

Tax analysis: In Isle of Wight NHS Trust v HMRC, the First-tier Tax Tribunal (FTT) decided that VAT at the standard rate had incorrectly been charged on supplies of locum medical practitioners the Appellant received. It found that the supplies were within the scope of the exemption provided for by Item 5 of Group 7 of Schedule 9 Part 2 to the Value Added Tax Act 1994.

FTT considers two cases on the calculation of the ‘reference salary’ and other aspects of the coronavirus (COVID-19) job retention scheme (City Blinds Scotland Ltd v HMRC and Complete Solutions Europe Ltd v HMRC)

Tax analysis: In both City Blinds Scotland Ltd v HMRC and Complete Solutions Europe Ltd v HMRC, the First-tier Tax Tribunal (FTT) made decisions concerning the coronavirus job retention scheme (CJRS), ie the coronavirus furlough scheme. Both cases included detailed consideration of the calculation of the reference salary for the purpose of the CJRS.

FTT considers two cases on the calculation of the ‘reference salary’ and other aspects of the coronavirus job retention scheme (City Blinds Scotland Ltd v HMRC and Complete Solutions Europe Ltd v HMRC)

Tax analysis: In both City Blinds Scotland Ltd v HMRC and Complete Solutions Europe Ltd v HMRC, the First-tier Tax Tribunal (FTT) made decisions concerning the coronavirus job retention scheme (CJRS), ie the COVID furlough scheme. Both cases included detailed consideration of the calculation of the reference salary for the purpose of the CJRS.

FTT considers application of remote gaming duty to promotional game and subsequent free spins (Jumpman Gaming Ltd v HMRC)

Tax analysis: In Jumpman Gaming Ltd, the First-tier Tax Tribunal (FTT) held that remote gaming duty (RGD) was not due on an initial promotional spin offered to new customers but was due on subsequent free spins.