Structuring and tax advice for investment managers
It is important that you choose a structure at the beginning that is suitable for your long term objectives and future plans. The treatment of private equity’s income has become more complex over recent years and it is important you consider both your long term objectives, and treatment of the carried interest and co-investment.
By ensuring the right structure is in place from the start it can ensure tax efficient profit extraction and remuneration. If a fund is set up without considering the tax implications, it can be costly for the managers and difficult to rectify in the future.
Tax structuring on investments and remuneration planning for key executives
Our specialist tax team advises on investment structuring for private equity and venture capital groups, offering comprehensive advice on the best way to structure investments whilst minimising tax leakage for the fund and investors.
Incentivising management is often a key objective. We can provide advice on remuneration structing, including equity incentivisation.
VAT partial exemption and special methods advice
As the activities of a fund are considered exempt for tax purposes, the formation of a VAT group to prevent output VAT leakage is preferable. This does make the group partially exempt, although the standard partial exemption is unlikely to work for private equity. Our VAT team has specialist experience in agreeing the ’two pots’ value method with HMRC, which is typically used for private equity and venture capital groups.
The acquisition and disposal of portfolio companies.
When disposing of a company, it is important that all of the key stakeholders are advised of the impact on their tax position. The timing of disposal proceeds and its reinvestment can alter the tax treatment.
