Quarterly Funds Update: Winter 2016

Written on 25 Feb 2016

Welcome to the latest edition of Osborne Clarke’s Quarterly Funds Update. We hope that you find it interesting. If you would like to discuss any of the content, or have a subject that you would like us to cover in a future edition, please let one of us know. Our contact details are set out below.

Carried interest may be taxed as income: what fund managers should do

On 9 December 2015 HMRC published rules that will have the effect of determining whether carried interest is taxed in the UK as capital gain or as income, by reference to the actual average holding period of assets in the relevant fund.

The Rules, if implemented, may cause a significant tension between the desire to realise assets at the time which is best commercially and the time which achieves capital gains tax treatment for the carried interest holders.

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10 things investment funds need to know about the UK’s new PSC register

Do you have funds invested in UK companies or have any UK limited liability partnerships in your structures? If so, from 6 April 2016 the details of some of the partners in your structure may need to be listed on the UK’s “people with significant control” register. Here are 10 things you need to know about the new PSC register regime.

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ILPA publishes new guidance on the reporting of private equity fees and expenses

On 29 January 2016 the Institutional Limited Partners Association published a new template to standardise the reporting of fund fees and expenses. This is the first publication of ILPA’s Fee Transparency Initiative which launched in May 2015 in an effort to establish consistent and robust standards for fee reporting and transparency amongst the private equity community. The template is designed to supplement a fund’s standard financial disclosures rather than be a substitute for other reports.

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New requirement to publish a “key information document” for individual investors in any type of investment fund

From 31 December 2016 certain fund managers will be required to publish a key information document to prospective investors in their funds, as a result of the EU’s Packaged Retail Investment and Insurance-based Investment Product Regulation.

Although the Regulation’s title suggests it will only be relevant to traditional packaged products, the detail reveals that it will also apply to any type of investment fund which accepts an individual investor who cannot be opted-up to professional client status based on the test in the MiFID.

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