The UK government has made several amendments to the qualifying asset holding company (QAHC) regime in the Spring Finance Bill 2023, following stakeholder discussions.
These changes are aimed at addressing issues with:
The ownership condition in the QAHC regime has caused some issues when dealing with multiple entities in a structure.
The new rules in the Spring Finance Bill 2023 create an exception for multi-vehicle arrangements, allowing feeder and parallel funds to meet the GDO condition.
The legislation allows for additional vehicles to be added to the arrangement later, which should accommodate changes in investors' requirements.
The government has made a significant change to the ownership condition, enabling corporate funds to use the GDO condition.
The amendment in the Spring Finance Bill 2023 expands the types of entities that can meet the GDO condition to include both a CIS and an AIF that is not a CIS solely because it is a body corporate.
This change is retrospective, taking effect from the introduction of the regime on 1 April 2022.
The Spring Finance Bill 2023 also amends the investment strategy condition, allowing QAHCs to hold listed securities and still meet the investment strategy condition.
However, this change comes with the denial of the distribution exemption for all listed securities, disadvantaging holdings that would otherwise qualify under the investment strategy condition. This change will take effect upon Royal Assent.
Overall, these amendments to the QAHC regime demonstrate the government's willingness to engage with stakeholders and address issues as they arise. The changes should make the regime more workable for a variety of investment arrangements and structures.
The multi-vehicle arrangement rule is expected to take effect when the Spring Finance Bill 2023 receives Royal Assent, likely in the summer of 2023.
In summary, the UK government has made several important changes to the QAHC regime in the Spring Finance Bill 2023.
These amendments address issues with:
Demonstrating the government's commitment to making the QAHC regime more workable for a variety of investment arrangements and structures.
If you have any queries about the the QAHC changes announced, then please get in touch.
