One minute with Chris Agnoli, a London-based partner in Ropes & Gray’s tax practice.
What’s keeping you busy at work?
I am very fortunate to have great breadth to my practice at Ropes alongside our outstanding core private equity mandates. Recently I have helped Astorg with the separation of Fastmarkets from Delinian following the joint take private transaction with Epiris, assisted BPEA EQT on the successful combination of Tricor and Vistra and worked on various LP investment and secondary transactions for several institutional investor clients.
What do you know now that you wish you’d known at the start of your career?
Two things stand out. First, teams are crucial, I have been very fortunate to work in two excellent tax teams in my career to date and making sure that you have people around you who will support you and work with you to find solutions makes an at times hard job manageable and enjoyable. Second, no-one knows all the answers so don’t allow the bravado of others to put you off giving your view; the beauty of practicing tax law is that it is constantly evolving, allowing for opportunity to learn new areas and develop new pockets of expertise.
If you could make one change to a tax law or practice, what would it be?
The UK has made great strides in building its brand as a centre for investment funds and sophisticated capital, notably with the introduction of the qualifying asset holding company regime. Frequently, however one or two practical aspects are overlooked when bringing about such changes which can leave gaps or issues. One ongoing complaint is the UK treatment of management fees for VAT purposes, in particular when considered against certain EU jurisdictions. Zero rating these fees would be a great stride towards being able to fully onshore fund platforms and holding structures, and it would allow the UK to really compete with Luxembourg.
What are clients asking about?
Changes to the UK REITs rules have helped REITs gain attention and traction with clients. Institutional investors are leading this charge, but we have also seen funds adopting underlying REIT entities where the investment mandate is suitably UK focused. From a practitioner’s perspective, some interesting interactions arise between types of investor in JV scenarios to ensure that each is getting the tax outcome that they could otherwise achieve through alternative structures and this has led to some engaging negotiations. Presumably with the ratification of the updated UK/Luxembourg double tax treaty in July this year more investors will be considering REITs as an alternative to offshore structures going forward.
Are there any new rules that are causing a particular problem in practice?
Stretching across the pond for this one, but the reach of the US federal tax system and the IRS never ceases to amaze me. The introduction of the new ECI withholding regime (1446f) and, in particular, the coming into force of GP withholding in January has led to some slightly ludicrous conversations with non-US managers in secondary fund transactions. Requests for certification from Italian managers running Luxembourg established funds with EU assets on the basis the entity is a partnership for US tax purposes is not something that makes for easy explanation. The technical possibility for 100% withholding does tend to get the issue dealt with, however.
And finally, you might not know this about me but...
I am a bit of an oenophile and wine collector. I have a number of friends who work in the wine industry and have spent many very happy times driving round France staying in local logis and tasting at various producers across the regions but my favourites have to be the Rhône and the Mâconnais. The collection is definitely outstripping my appetite, so I will have to look for an excuse for some large gatherings in the coming years!
One minute with Chris Agnoli, a London-based partner in Ropes & Gray’s tax practice.
What’s keeping you busy at work?
I am very fortunate to have great breadth to my practice at Ropes alongside our outstanding core private equity mandates. Recently I have helped Astorg with the separation of Fastmarkets from Delinian following the joint take private transaction with Epiris, assisted BPEA EQT on the successful combination of Tricor and Vistra and worked on various LP investment and secondary transactions for several institutional investor clients.
What do you know now that you wish you’d known at the start of your career?
Two things stand out. First, teams are crucial, I have been very fortunate to work in two excellent tax teams in my career to date and making sure that you have people around you who will support you and work with you to find solutions makes an at times hard job manageable and enjoyable. Second, no-one knows all the answers so don’t allow the bravado of others to put you off giving your view; the beauty of practicing tax law is that it is constantly evolving, allowing for opportunity to learn new areas and develop new pockets of expertise.
If you could make one change to a tax law or practice, what would it be?
The UK has made great strides in building its brand as a centre for investment funds and sophisticated capital, notably with the introduction of the qualifying asset holding company regime. Frequently, however one or two practical aspects are overlooked when bringing about such changes which can leave gaps or issues. One ongoing complaint is the UK treatment of management fees for VAT purposes, in particular when considered against certain EU jurisdictions. Zero rating these fees would be a great stride towards being able to fully onshore fund platforms and holding structures, and it would allow the UK to really compete with Luxembourg.
What are clients asking about?
Changes to the UK REITs rules have helped REITs gain attention and traction with clients. Institutional investors are leading this charge, but we have also seen funds adopting underlying REIT entities where the investment mandate is suitably UK focused. From a practitioner’s perspective, some interesting interactions arise between types of investor in JV scenarios to ensure that each is getting the tax outcome that they could otherwise achieve through alternative structures and this has led to some engaging negotiations. Presumably with the ratification of the updated UK/Luxembourg double tax treaty in July this year more investors will be considering REITs as an alternative to offshore structures going forward.
Are there any new rules that are causing a particular problem in practice?
Stretching across the pond for this one, but the reach of the US federal tax system and the IRS never ceases to amaze me. The introduction of the new ECI withholding regime (1446f) and, in particular, the coming into force of GP withholding in January has led to some slightly ludicrous conversations with non-US managers in secondary fund transactions. Requests for certification from Italian managers running Luxembourg established funds with EU assets on the basis the entity is a partnership for US tax purposes is not something that makes for easy explanation. The technical possibility for 100% withholding does tend to get the issue dealt with, however.
And finally, you might not know this about me but...
I am a bit of an oenophile and wine collector. I have a number of friends who work in the wine industry and have spent many very happy times driving round France staying in local logis and tasting at various producers across the regions but my favourites have to be the Rhône and the Mâconnais. The collection is definitely outstripping my appetite, so I will have to look for an excuse for some large gatherings in the coming years!
