We advise investors to seek independent tax advice with respect to the local tax treatment of their investments on the Odin platform.
We have received tax advice indicating that UK investors are liable only for capital gains tax net of any carried interest paid to syndicate leads.
Carried Interest returns in the UK are carved out of the DIMF rules and taxed separately. Effectively, sums allocated to an individual by way of carried interested are treated, for tax purposes, as if the recipient had personally carried out the underlying transaction that gave rise to the income. The carried-interest Income Tax rules provide broadly, that any sum of carried interest arising from an SPV or fund is eligible for capital gains tax treatment only if the investment vehicle holds investments, on average, for at least 40 months. Partial CGT treatment is available where the average holding period is between 36-40 months. Where the average holding period is below three years, all sums of carried interest arising to the individual − however structured − are charged to tax and NICs as trading profits.