U.S. Investors - Reporting & Treatment for US Federal Income Tax (Odin UK Bare Trust SPV)
U.S. Federal Income Tax Treatment of a U.S. Person Investing through an Odin UK Bare Trust Special Purpose Vehicle (SPV)
This information is provided to those investors who are “United States persons” within the meaning of the United States Internal Revenue Code of 1986, as amended and the regulations thereunder. It is not relevant to anyone who is not a United States person. This is not intended to be a comprehensive discussion of all of the U.S. federal income tax consequences relevant to a U.S. investor. You are encouraged to consult your own independent tax advisor regarding the U.S. federal, state and local tax consequences of this investment.
Odin intends to treat your investment via an Odin UK Bare Trust SPV (“SPV Investment”) as a constructive partnership for U.S. federal income tax purposes. Assuming that the investment is treated as a constructive partnership for such purposes, you will be treated as owning your proportionate share of the SPV Investment legally owned by the investment vehicle (an Odin SPV). As such, you will be required to include on your annual U.S. federal income tax return for each year your share of dividend income and capital gain or capital loss realized with respect to the SPV Investment. Odin will annually provide you with the information regarding your share of dividend income, capital gain, capital loss and other relevant tax items for U.S. federal income tax purposes.
You may be required to file Internal Revenue Service (“IRS”) Form 8938 with information relating to the SPV Investment if the value of certain foreign financial assets owned by you exceeds a dollar threshold, unless the SPV Investment is held through an account maintained with a U.S. financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. You should consult your own tax advisor with respect to these reporting obligations or any other applicable filing requirements with respect to the Shares.
It is possible that the IRS may disagree with Odin’s characterization of the investment in the Shares as a constructive partnership. The IRS may seek to recharacterize the investment differently, such as an investment in a “passive foreign investment company” for U.S. federal income tax purposes. Such alternative characterizations may change the timing or character of inclusions of income, gain or loss with respect to the investment. In addition, additional information reporting requirements may apply. You are encouraged to consult with your own tax adviser regarding the proper treatment of the investment in the Shares.
The above discussion is not intended to constitute tax advice. You are encouraged to seek advice from your own independent tax advisor based on your particular circumstances.
As a US Person, what information does Odin provide for me for my tax filings? How do I access it?
In the case of a distribution resulting from an exit, dividend or otherwise, Odin will provide you with a “Distribution notice” detailing, among other information, the income associated with that distribution event. You will have received this by email to the email associated with your account upon an exit.
If you haven’t received any payments or distribution notices from Odin with respect to your investments, you most likely have not had any income relating to your investments.
In the page for the relevant deal on the Odin platform you will also be able to see other useful information relating to your investment, such as a Proof of Investment document.
What are the tax documents that I need to file as an investor through Odin's Bare Trust SPV structure?
You may be required to file IRS Form 8938 - “Statement of Specified Foreign Financial Assets” if the value of certain foreign financial assets owned by you exceeds a dollar threshold, unless your investment is held through an account maintained with a U.S. financial institution.
In addition, in certain circumstances, you may be required to file IRS Form 8865 with respect to the constructive partnership.
The above is not intended to constitute tax advice - you should always consult your tax advisor as to what course of action is required for your specific circumstances. If you have any questions regarding this matter, please contact your Financial Advisor and/or a U.S. tax advisor, or reach out to Odin at hello@joinodin.com.