Consultations & legislation
Consultation on contractual schemes for collective investment
Issued: 09 January 2012
Open date: 09 January 2012
Close date: 19 March 2012
Background
The Government announced its intention in Budget 2011 to introduce a new, regulated, tax-transparent fund vehicle primarily to facilitate the setting up of pooled “Master Funds” under the Undertakings for Collective Investments in Transferable Securities IV Directive (UCITS IV).
The main objective of introducing contractual schemes is to ensure that the UK is able to compete to win an appropriate share of European pooled funds as UK domiciled funds and to consolidate the UK’s position as the largest asset management centre in Europe.
The UCITS IV directive, which was implemented in July 2011, introduces the ability for UCITS funds to establish master-feeder arrangements. However in order for a so called “master-feeder” structure to be attractive to investors on a cross-border basis the master fund needs to be a tax-transparent vehicle. As the Financial Services and Markets Act 2000 (FSMA) does not provide for the authorisation of tax-transparent collective investment schemes, it is currently not possible to have a tax-transparent UCITS master fund domiciled in the UK.
The measures outlined in this paper would allow for the authorisation of UK domiciled schemes established by contract and governed by the terms of a deed between the operator of the scheme and the investing participants.
Consultation
The aim of this consultation is to gather views and evidence on the costs and benefits of the new fund vehicle, likely take up by industry and the tax and legal arrangements needed for it to be deployed effectively.
This consultation document explains the background to the Government’s proposals, the structure of the vehicles, the required regulatory and tax legislation and sets out the expected benefits of introducing the contractual schemes.
HM Treasury would like to hear from all interested parties. Respondents should address any of the questions in the consultation document where they feel they can make a contribution, as well as offering any further comments they may have.
A separate consultation is being carried out covering legislation being introduced in the Finance Bill 2012 regarding the tax treatment of individuals in such collective investment schemes for the purpose of tax on capital gains.
Consultation documents
- Consultation on contractual schemes for collective investment (PDF 2.96MB)
- Consultation on draft legislation for Finance Bill 2012
Contact us
Please send responses to:Contractual Scheme Consultation
Financial Regulation and Markets
HM Treasury
1 Horse Guards Road
SW1A 2HQ
or email: taxtransparentfund@hmtreasury.gsi.gov.uk
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