Taxation-hedge fund, Financial Management

Assignment Help:

Taxation

In the US, every state has a different set of rules governing the taxation of Hedge Funds and the investors who put their money in them. In some countries, Hedge Funds are taxed in the same way as unit trusts, with income tax due each year on income payments and capital gains tax on profits. However, fund managers should select a tax efficient structure that gives maximum tax benefits to the investors. A Limited Partnership for domestic investors and Corporation structure for offshore Funds in tax haven countries like Cayman Islands, Malaysia, etc., are considered better Hedge Fund structures. Cayman Islands alone accounts for 80 percent of the registered Hedge Funds due to the benefits available in corporation structure for offshore entitiesIn general, the fund manager tries to structure the Hedge Fund, which will result in maximum tax savings to the founders and investors. The parties that are involved in the tax structuring are the investors, the Hedge Fund, the fund management company and the founders. The structure's overall aim is to ensure:

  • No tax burden on the fund;
  • Avoidance of double taxation to investors on investment in the fund;
  • Minimizing tax payments worldwide by the fund management company (or companies or corporations); and
  • Maximizing allowances/relieves from capital gains for the founders.

 


Related Discussions:- Taxation-hedge fund

Describe the internal control procedures, Board should encourage a strong c...

Board should encourage a strong control culture. Manager's bonus must not only be linked to company profits but also linked to internal control procedures being adhered to. There m

Eps, a. Calculate expected earnings per share (EPS) if the firm is perfectl...

a. Calculate expected earnings per share (EPS) if the firm is perfectly hedged. EPS $

What are the main elements of capital budgeting decisions, What are the mai...

What are the main elements of capital budgeting decisions There are three elements of capital budgeting decisions (i) long-term assets and their composition (ii) business

Explain the terminologies of finance, Explain the terminologies of finance ...

Explain the terminologies of finance Raise and efficiently utilise funds which are your disposal (or at least try to).That a business organisation also needs to do the same can

Illustrate about foreign exchange earnings, Q. Illustrate about foreign exc...

Q. Illustrate about foreign exchange earnings? In theory foreign exchange earnings must not be hedged as the chances of an adverse movement are equivalent to those of a favoura

Valuing a callable bond using binomial model, The process of va...

The process of valuing a callable bond is similar to that of an option-free bond, except for one thing - when the call option may be exercised b

Bse-500 and sectoral indices, BSE-500 and Sectoral Indices On August 9,...

BSE-500 and Sectoral Indices On August 9, 1999, another new index was introduced in the market which was based on the data of 500 companies and designated as BSE-500 index. It

Explain medium term expenditure framework, Question 1: The various crit...

Question 1: The various criteria for evaluating a revenue measure or system are: ? Yield ? Political expediency ? Consistency with economic and social goals ?

Types of financial statement analysis, Q. Types of financial statement anal...

Q. Types of financial statement analysis? 1) External analysis This analysis is performed by external stakeholders like lenders, suppliers, investors, and governments. 2)

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd