What should you do?
The rules on DIMF are complex and of wide scope, potentially catching incorrectly structured payments and even amounts received before a fund has generated profits. While the rules are often thought of in the context of private equity funds, which are typically structured as partnerships, the rules are not restricted to private equity and, since 6 April 2016, no longer require the involvement of a partnership. Therefore, if you’re setting up or providing investment management services to an investment fund and expect to receive distributions, it’s important that you understand the potential UK tax exposures, the availability of exemptions and their impact on your UK tax position.
We can assist you in understanding the rules, the impact on your tax position and ensuring that funds are structured correctly to fall within the relevant exemptions or, where possible, to fall outside the scope of DIMF. Where necessary, we can also assist with tax reporting in the UK or rectifying historic omissions.