Taxation of funds: has 2021 lived up to its promise?

For various commercial reasons and as recognised by HM Treasury fund structures deploy a range of different entities below the level of the fund to make investments hold assets and ensure the efficient passage of returns to investors. It has always been expected that in selecting the jurisdiction for the holding company account will be taken of the eligibility of that vehicle for a wide range of double tax treaties to minimise underlying withholding tax and non-resident capital gains tax in investee jurisdictions (as well as minimising any tax leakage in the entity). However 2021 saw a step up in the ‘war on holding companies’ which is making it increasingly difficult for holding companies to benefit from double tax treaties. The latest challenge comes from the publication by the European Commission...