A&M London Virtual Asset Manager Roundtable on 12 May 2021

On 12 May 2021, our Asset Manager Tax colleagues in London hosted the third London Virtual Asset Manager Roundtable event covering the following presentation topics:

• Market update provided by Daniel Parry, Managing Director and Head of Funds Tax;
• Update on the Disguised Investment Management Fee rules provided by Daniel Parry;
• Overview of HM Revenue & Customs (“HMRC”) enquiries into the tax treatment of carried interest provided by Shirley Ly, Associate Director; and
• Guest presentation by IQ-EQ on Environmental, Social and Corporate Governance.

Please click on the link above to download a copy of the presentation or to listen to a recording of the event.

Overview of U.K. commentary on recent U.S. tax changes

U.S. President Joe Biden delivered news of impending U.S. tax increases in a speech to a joint session of U.S. Congress in late April.

The key tax highlights include:

• A reintroduction of the 39.6% top tax rate (more than $400,000) for individuals.
• A new provision which will tax individual's Long Term Capital Gains and Qualified Dividends (for those with ‘income’ over $1m) at the top rate of tax (39.6% proposed). Net Investment Income Tax (NIIT) would also apply, taking the overall rate to a potential 43.4%.
• Closing of the “carried interest loophole” and eliminating the tax benefit for certain taxpayers. 
• A new Internal Revenue Service focus on the tax affairs of the wealthy. 
• An increase in the corporation tax rate from 21% to 28%. It should be remembered that state corporate taxes are in addition.

Please refer to the full article “U.S. Tax Changes – U.K. Commentary” on our website for more information.

Employment Related Securities ("ERS") reporting reminder for 6 July 2021

We wanted to provide another reminder that following the end of the 2020/21 U.K. tax year, annual ERS returns should be submitted to HMRC by 6 July 2021. 

The ERS annual return will report any new or existing share plans (including co-investment and carried interest entitlements) to HMRC for 2020/21 and involves a number of key tasks, including:

• Registering new share plan arrangements;
• Verifying or self-certifying the tax-advantaged plans in place; and
• Submitting annual returns with all reportable events (including nil returns).

All ERS annual returns should be filed with HMRC on or before 6 July 2021 for the tax year 2020/21, with late filings resulting in an automatic penalty and potentially significant consequences for tax-advantaged plans.

If you need any assistance or if you are unsure whether you are required to file an ERS annual return for 2020/21, please don’t hesitate to get in touch.