A new tax efficient UK holding vehicle (qualifying asset holding company or “QAHC”) was launched in April 2022. The government initially published plans for the new regime in March 2020, and the BVCA engaged with HMT and HMRC in the development of the rules. In our discussions, we highlighted the need for the regime to be easy to access, competitive from a tax perspective, and as straightforward to operate as possible.
The QAHC regime includes qualifying criteria and has a range of tax benefits, including a broad exemption from tax on gains from shares. The new vehicle is a key part of the wider funds review being carried out by the government that is designed to enhance the UK’s attractiveness to the fund management sector, and allow the UK to compete with other European destinations for asset holding companies such as Luxembourg and Ireland.
Following the initial launch of the QAHC, the BVCA continued to engage in dialogue with HMRC to find solutions for some outstanding issues that were preventing certain categories of fund from benefiting from the new regime. These concerned, in particular, the rules that require funds that own QAHCs to be widely held. Changes to improve these rules came into effect from July 2023.
The BVCA also worked with HMRC on the development of associated guidance (both on the initial regime and the subsequent improvements). This was published in HMRC's Investment Funds Manual:
BVCA Submissions
- Response to HM Treasury’s call for input on the UK funds regime (April 2021)
- Response to the HMT consultation on the Tax Treatment of Asset Holding Companies in Alternative Fund Structures (February 2021)
- Response to the HMT consultation on the Tax Treatment of Asset Holding Companies in Alternative Fund Structures (August 2020)