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Investment and Tax Clinic | 9
The Investment
International
Investment and Tax Clinic
Miles Dean and Andrew Murray,
partners in Milestone, provide
advice in this month’s clinic
M
ilestone is a boutique on transfer of the assets from the
international tax practice existing structure to a new holding vehicle.
based in Mayfair. They Due to the increasing international antipathy
provide tax advice to a towards tax havens (and similar arrangements)
broad range of clients, from we proposed removing the existing Delaware
corporates with LLCs and inserting an EU holding company
international activities to investment funds to that would be held by a Swiss managed trust.
high net worth individuals. The EU holding company would, in turn, hold
The examples set out below provide a précis the operating assets in Latin America. The
of several client cases Milestone has recently client, his children and members of his The resulting structure allowed our client to
undertaken. The responses and content of this extended family would be beneficiaries of the benefit from a two-tier holding structure that
note are general in nature and do not trust. We were also able to utilise a bi-lateral utilised onshore and offshore entities and
constitute tax advice. We recommend that investment treaty agreed between the holding struck an appropriate balance between tax
specific advice is sought for any international and operating jurisdictions. These treaties optimisation and the one-off tax costs of
transaction. provide a certain degree of protection for restructuring.
foreign direct investments and are extremely
A South American national with significant helpful for structuring in Latin American A London based art dealer asked us to
worldwide commercial interests sought countries. advise on the establishment of an
advice on a corporate acquisition together
with wealth maintenance and succession circle6
In addition, we ensured that: international art trading fund that would
profits could be repatriated within (and out provide off market trading, hedging, portfolio
planning opportunities for his existing of) the structure with minimum tax leakage management and custodial services.
structure. Our client had a preference for a
European holding structure. circle6
to enhance internal rates of return; Our client wanted to target UK and non-UK
capital gains could be deferred as part of the investors for the fund and base the investment
The client’s primary driver was ensuring that
wealth (both existing and potential) within the circle6
restructuring to reduce tax leakage; advisory activities in the UK. As with all fund
the structure could be ‘future-proofed’ as far arrangements, the primary driver of the
structure could be preserved and passed to
future generations. The main restructuring circle6
as practicable; and internal rate of return is the asset class itself. In
the proposals would be commercially and this case, we focussed on the esoteric nature of
impediment (at least from a tax perspective) practically workable for our client on a day the underlying asset class in determining the
was the crystallisation event that would arise to day basis. operating structure of the fund.
www.investmentinternational.com June 2009 Investment International
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