One minute with Rebecca Hill, tax partner in the London office of Kirkland & Ellis International LLP.
What’s keeping you busy at work?
I advise during the full life cycle of private funds that invest in real assets, credit and private equity. My work is varied (requiring consideration of individual and corporate tax rules, both in the UK and internationally). In a typical week, I advise clients on the structuring of their funds, carried interest/co-invest and management entities. I also negotiate tax provisions of fund documents with investors. I speak frequently with our US, German and French tax teams, as well as other tax advisers across Europe.
The intersection of M&A, finance and funds work is an increasing area of focus. An example includes advising on continuation fund transactions, which are essentially a M&A transaction and fund raise rolled into one. Another example is working on deals where the structuring tees off the tax characteristics of the investors in the fund (such as their sovereign or their qualifying institutional investor status). Fund financings, including capital call facilities, NAV facilities, GP facilities and preferred equity transactions, are also adding increasing complexity to fund structuring projects.
In addition to technical tax work, I spend a lot of time recruiting, mentoring and training our team. We strive to create a diverse and inclusive culture in which our associates have the opportunities and support to fast-track their careers.
Are there any new rules that are causing a particular problem?
The introduction of the UK qualifying asset holding company (or ‘QAHC’) regime is a really welcome development and has attracted a lot of interest from fund sponsors, who are keen to benefit from the substance and operational benefits of operating their holding platforms from the UK. Whilst changes to the regime are being considered, for the time being there can still be issues with meeting certain criteria to qualify as a QAHC. These issues can arise with common parallel fund, master/feeder, aggregator and alternative investment vehicle structures. Also, the requirement that the strategy be non-trading can create uncertainty as to whether QAHCs can be used for some strategies, despite updated HMRC guidance published earlier this year. Hopefully, these remaining issues will be cleared up in the near term to make the QAHC regime even more attractive to fund managers.
If you could make one change to tax, what would it be?
The most obvious change would be to make supplies of management services to AIFs zero rated for VAT purposes, so fund managers are no worse off from a VAT perspective when they use UK based fund structures.
What do you know now that you wish you’d known at the start of your career?
That it is possible to balance being a working parent with a role as a tax partner in a top tier international law firm. The support of an excellent team and increased flexibility makes this even more possible. I would encourage associates who are daunted by the prospect of juggling parenthood with a busy workload to find role models to speak to.
What should we look out for in 2023?
Areas to watch on the funds tax side include: the government’s response to the consultation on sovereign immunity from direct taxation, the BlueCrest appeals (both the appeal of the FTT decision relating to the salaried member rules and anticipated appeal, at least in part, of the UT decisions relating to partnership profit allocation and a partnership incentivisation plan), the proposed consultation on options to simplify the VAT treatment of fund management fees and the proposed amendments to the QAHC legislation. On the international side, I will also be watching developments in relation to the European Commission’s proposed ‘unshell’ directive (or ATAD III as it is commonly referred to) closely, given its impact on fund holding structures.
You might not know this about me but...
Like many people, I became a convert to cold water swimming during lockdown!
One minute with Rebecca Hill, tax partner in the London office of Kirkland & Ellis International LLP.
What’s keeping you busy at work?
I advise during the full life cycle of private funds that invest in real assets, credit and private equity. My work is varied (requiring consideration of individual and corporate tax rules, both in the UK and internationally). In a typical week, I advise clients on the structuring of their funds, carried interest/co-invest and management entities. I also negotiate tax provisions of fund documents with investors. I speak frequently with our US, German and French tax teams, as well as other tax advisers across Europe.
The intersection of M&A, finance and funds work is an increasing area of focus. An example includes advising on continuation fund transactions, which are essentially a M&A transaction and fund raise rolled into one. Another example is working on deals where the structuring tees off the tax characteristics of the investors in the fund (such as their sovereign or their qualifying institutional investor status). Fund financings, including capital call facilities, NAV facilities, GP facilities and preferred equity transactions, are also adding increasing complexity to fund structuring projects.
In addition to technical tax work, I spend a lot of time recruiting, mentoring and training our team. We strive to create a diverse and inclusive culture in which our associates have the opportunities and support to fast-track their careers.
Are there any new rules that are causing a particular problem?
The introduction of the UK qualifying asset holding company (or ‘QAHC’) regime is a really welcome development and has attracted a lot of interest from fund sponsors, who are keen to benefit from the substance and operational benefits of operating their holding platforms from the UK. Whilst changes to the regime are being considered, for the time being there can still be issues with meeting certain criteria to qualify as a QAHC. These issues can arise with common parallel fund, master/feeder, aggregator and alternative investment vehicle structures. Also, the requirement that the strategy be non-trading can create uncertainty as to whether QAHCs can be used for some strategies, despite updated HMRC guidance published earlier this year. Hopefully, these remaining issues will be cleared up in the near term to make the QAHC regime even more attractive to fund managers.
If you could make one change to tax, what would it be?
The most obvious change would be to make supplies of management services to AIFs zero rated for VAT purposes, so fund managers are no worse off from a VAT perspective when they use UK based fund structures.
What do you know now that you wish you’d known at the start of your career?
That it is possible to balance being a working parent with a role as a tax partner in a top tier international law firm. The support of an excellent team and increased flexibility makes this even more possible. I would encourage associates who are daunted by the prospect of juggling parenthood with a busy workload to find role models to speak to.
What should we look out for in 2023?
Areas to watch on the funds tax side include: the government’s response to the consultation on sovereign immunity from direct taxation, the BlueCrest appeals (both the appeal of the FTT decision relating to the salaried member rules and anticipated appeal, at least in part, of the UT decisions relating to partnership profit allocation and a partnership incentivisation plan), the proposed consultation on options to simplify the VAT treatment of fund management fees and the proposed amendments to the QAHC legislation. On the international side, I will also be watching developments in relation to the European Commission’s proposed ‘unshell’ directive (or ATAD III as it is commonly referred to) closely, given its impact on fund holding structures.
You might not know this about me but...
Like many people, I became a convert to cold water swimming during lockdown!
