{"id":8412,"date":"2022-06-23T11:58:00","date_gmt":"2022-06-23T11:58:00","guid":{"rendered":"https:\/\/iqeq.com\/?p=8412"},"modified":"2023-08-16T15:21:49","modified_gmt":"2023-08-16T15:21:49","slug":"how-uks-new-qualifying-asset-holding-company-regime-can-benefit-your-firm","status":"publish","type":"post","link":"https:\/\/iqeq.com\/insights\/how-uks-new-qualifying-asset-holding-company-regime-can-benefit-your-firm\/","title":{"rendered":"How the UK\u2019s new Qualifying Asset Holding Company regime can benefit your firm"},"content":{"rendered":"<section class=\"text-block standard-spacing  \">\n    <div class=\"container fade-in\">\n        <p class=\"introduction\" style=\"text-align: justify\">Recently finalised as part of the UK\u2019s\u00a0<a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/2022\/3\/enacted\">Finance Act 2022<\/a>, the Qualifying Asset Holding Company regime was formally introduced on 1 April of this year with the intention of making the UK competitive with commonly used European asset holding jurisdictions such as Luxembourg and Ireland.<\/p>\n<p style=\"text-align: justify\">The new regime represents a key shift in the UK\u2019s tax strategy for asset management and is a clear sign that the UK intends to present an attractive alternative to popular EU jurisdictions\u00a0<a href=\"https:\/\/iqeq.com\/insights\/brexit-cant-topple-london-asset-owners-champion\">post-Brexit<\/a>.<\/p>\n<p style=\"text-align: justify\">In this article, we will provide a brief overview of the new regime before analysing its key uses and benefits.<\/p>\n<h4 style=\"text-align: justify\"><strong>What is the QAHC regime?<\/strong><\/h4>\n<p style=\"text-align: justify\">The\u00a0<a href=\"https:\/\/www.gov.uk\/government\/publications\/qualifying-asset-holding-companies-qahcs\/qualifying-asset-holding-companies-qahcs\">Qualifying Asset Holding Company (QAHC) regime<\/a>\u00a0was designed to make it easier for institutional investors and funds to use UK companies in asset-holding structures across a range of private market investment strategies.<\/p>\n<p style=\"text-align: justify\"><strong>At its core, the new regime is designed to create a beneficial and low-friction tax regime for eligible companies.<\/strong>\u00a0The scheme will allow investment funds to house their \u2018under the fund\u2019 investment holding structures in the UK under a dedicated tax regime for QAHCs.<\/p>\n<p style=\"text-align: justify\">The QAHC regime incorporates existing elements of other holding company regimes that make jurisdictions like Luxembourg and Ireland attractive. As well as applying many of these elements to the UK, the regime additionally offers:<\/p>\n<ul style=\"text-align: justify\">\n<li><strong>Simplicity:\u00a0<\/strong>The core advantage of the UK\u2019s QAHC regime is that it can be operated wholly from within the UK, making it less expensive and operationally easier to establish necessary substance, as well as more straightforward to apply for<\/li>\n<\/ul>\n<ul style=\"text-align: justify\">\n<li><strong>Generous tax exemptions:\u00a0<\/strong>The regime includes a broad exemption from tax on gains from shares (<a href=\"https:\/\/www.macfarlanes.com\/media\/4123\/uk-asset-holding-company-regime.pdf\">with some caveats<\/a>) and non-UK land. There will be a complete exemption for foreign property business income as well as tax benefits for investors, making it easier for them to access returns as capital<\/li>\n<\/ul>\n<h4 style=\"text-align: justify\"><strong>What are the benefits?<\/strong><\/h4>\n<p style=\"text-align: justify\">Historically, the UK has not been an attractive jurisdiction for asset holding companies due to its\u00a0<a href=\"https:\/\/iqeq.com\/funds\/tax-compliance-and-advisory-us\">tax rules<\/a>. However, the jurisdiction is looking to actively entice these companies with the launch of this dedicated tax regime.<\/p>\n<p style=\"text-align: justify\">And the timing is good, with EU proposals surrounding shell entities (known as\u00a0ATAD 3) prompting investors and asset managers to reassess the long-term viability of their existing structures. Using a UK structure will align with people and operations in many cases, making the structure less open to challenge under double taxation treaties.<\/p>\n<p style=\"text-align: justify\">The relatively strict\u00a0<a href=\"https:\/\/home.kpmg\/uk\/en\/home\/insights\/2022\/03\/tmd-the-qualifying-asset-holding-company-regime.html\">eligibility criteria<\/a>\u00a0should also boost the reputation of the QAHC regime abroad, making it more sustainable and, again, potentially less open to challenge.<\/p>\n<p style=\"text-align: justify\"><strong>Key benefits of the new regime include:<\/strong><\/p>\n<ul style=\"text-align: justify\">\n<li>Suitable for private equity, venture capital, credit and real estate investments<\/li>\n<li>Provides tax neutrality for qualifying firms<\/li>\n<li>Offers access to tax treaties<\/li>\n<li>Provides a wide capital gains and dividends exemption<\/li>\n<li>Allows capital gains repatriation to UK investors<\/li>\n<li>Does not impose withholding tax on distributions and interest<\/li>\n<li>Inexpensive and easy to set up, with low operational costs<\/li>\n<li>Enables UK QAHCs to avoid ATAD 3 substance requirements<\/li>\n<li>Encourages UK-based fund managers to utilise their existing operational substance<\/li>\n<\/ul>\n<h4 style=\"text-align: justify\"><strong>Get in touch<\/strong><\/h4>\n<p style=\"text-align: justify\">With 500+ employees in the UK focused on\u00a0<a href=\"https:\/\/iqeq.com\/funds\">fund<\/a>\u00a0and\u00a0<a href=\"https:\/\/iqeq.com\/debt-capital-markets-corporates\">corporate<\/a>\u00a0services, IQ-EQ has the experience to provide a full suite of support for clients looking to use the QAHC regime for their holding structures.<\/p>\n<p style=\"text-align: justify\">IQ-EQ provides incorporation, domiciliation, directorships and company secretarial services under the QAHC regime. Once your structure is up and running, experienced professionals manage\u00a0<a href=\"https:\/\/iqeq.com\/insights\/5-reasons-your-firm-needs-comprehensive-compliance-strategy\">corporate compliance<\/a>\u00a0and governance, as well as all aspects of QAHC administration, accounting and reporting. At the conclusion of the entity, we will work with your legal and tax advisors to ensure an efficient winding down process, reporting to HMRC and transaction management.<\/p>\n<p style=\"text-align: justify\">Contact us today to learn how we can put our expertise to work for you.<\/p>\n            <\/div>\n<\/section>\n\n<section class=\"related-section related-section--people related-section--centered standard-spacing\">\n    <div class=\"container\">\n                    <h2>Key Contacts<\/h2>\n                <div class=\"cards row-load\">\n            <div class=\"person-card\">\n            <div class=\"bg-img lozad normal\">\n            <img width=\"290\" height=\"192\" class=\"attachment-person_card size-person_card lozad\" alt=\"\" data-src=\"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/04\/Ed-Beale-Formal-Grey-290x192.png\" \/>        <\/div>\n        <div class=\"bg-img lozad hover\">\n            <img width=\"290\" height=\"192\" class=\"attachment-person_card size-person_card lozad\" alt=\"\" data-src=\"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/04\/Ed-Beale-Informal-Green_0-290x192.png\" \/>        <\/div>\n        <div class=\"info\">\n                    <h3>Ed Beale<\/h3>\n                <p class=\"job-title\">Director, Funds, UK<\/p>\n        <div class=\"border\"><\/div>\n                    <p class=\"location\">United Kingdom<\/p>\n                <a href=\"#contact-person\" class=\"link link--deepgray email\">\n            Send email        <\/a>\n                    <a href=\"tel:+442073676922\" class=\"link telephone\">\n                +44 20 7367 6922            <\/a>\n                                    <div class=\"socials\">\n                <a href=\"https:\/\/www.linkedin.com\/in\/ed-beale-67856980\/\" class=\"linkedin\">\n                    <span class=\"screen-reader-text\">LinkedIn<\/span>\n                <\/a>\n            <\/div>\n            <\/div>\n<\/div><div class=\"person-card\">\n            <div class=\"bg-img lozad normal\">\n            <img width=\"290\" height=\"192\" class=\"attachment-person_card size-person_card lozad\" alt=\"\" data-src=\"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/04\/Jack-Standen-Grey-_0-290x192.jpg\" \/>        <\/div>\n        <div class=\"bg-img lozad hover\">\n            <img width=\"290\" height=\"192\" class=\"attachment-person_card size-person_card lozad\" alt=\"\" data-src=\"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/04\/Jack-Standen-Green--290x192.jpg\" \/>        <\/div>\n        <div class=\"info\">\n                    <h3>Jack Standen<\/h3>\n                <p class=\"job-title\">Managing Director, International Funds, U.S.<\/p>\n        <div class=\"border\"><\/div>\n                    <p class=\"location\">United States<\/p>\n                <a href=\"#contact-person\" class=\"link link--deepgray email\">\n            Send email        <\/a>\n                    <a href=\"tel:+442073975489\" class=\"link telephone\">\n                +44 207 397 5489            <\/a>\n                                    <div class=\"socials\">\n                <a href=\"https:\/\/www.linkedin.com\/in\/jack-standen-550063b6\/\" class=\"linkedin\">\n                    <span class=\"screen-reader-text\">LinkedIn<\/span>\n                <\/a>\n            <\/div>\n            <\/div>\n<\/div>        <\/div>\n        <div class=\"button-wrapper\">\n                    <\/div>\n    <\/div>\n<\/section>","protected":false},"excerpt":{"rendered":"","protected":false},"author":11,"featured_media":8413,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[1],"tags":[],"expertise":[444,17],"service_category":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.0 - 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