On 25 January, the UK Treasury launched a wide-ranging Consultation on how to make the UK a more attractive location to set up, manage and administer funds.  The objective being to create a destination which will support a wider range of more efficient investments, better suited to investors’ needs.  The consultation has a deadline for input of 20 April 2021.

The UK Government recognizes that the UK asset management sector is already highly attractive and that the UK is a market leader in portfolio management and fund administration. These activities are key to the management of the savings and pensions of millions of people.

The Consultation stresses the UK Government’s continued commitment to supporting portfolio delegation from and to the UK as a means to promote market efficiency, investor choice and to reflect the international nature of financial markets.

The Consultation is deliberately wide-ranging and seeks views on a range of issues, including:

  • How to enhance the UK’s existing strengths in portfolio management and fund administration by addressing barriers to establishing and running funds within the UK.
  • How to identify which reforms should be taken forward and how these should be prioritised.
  • What reform is needed to direct and indirect taxations systems.
  • How to improve relevant areas of funds regulation to reflect the fact that firm- and fund-level decisions are taken by reference to the overall commercial, tax and regulatory environment for funds.
  • How to support the growth of such fund administration clusters outside of London and the South East.
  • How to adjust the roles and improve the performance of industry and government to make the UK regime a global success, including through trade promotion.

This Consultation does not seek views on how to encourage the asset management industry to play a role in channeling investment into companies, technologies and infrastructure that will enable a rapid low carbon transition.  This workstream is being taken forward separately and are not within the scope of this call for input.

This Consultation is part of a wider review of the attractiveness of the UK as an investment destination.  The wider review encompasses two additional workstreams which are also out of scope of this Consultation.

  1. A detailed consultation on the Government’s proposals on the tax treatment of asset holding companies in alternative fund structures.
  2. A review of the VAT treatment of fund management fees.
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Photo of Thomas Reilly Thomas Reilly

Ambassador Thomas Reilly, Covington’s Head of UK Public Policy and a key member of the firm’s Global Problem Solving Group and Brexit Task Force, draws on over 20 years of diplomatic and commercial roles to advise clients on their strategic business objectives.

Ambassador…

Ambassador Thomas Reilly, Covington’s Head of UK Public Policy and a key member of the firm’s Global Problem Solving Group and Brexit Task Force, draws on over 20 years of diplomatic and commercial roles to advise clients on their strategic business objectives.

Ambassador Reilly was most recently British Ambassador to Morocco between 2017 and 2020, and prior to this, the Senior Advisor on International Government Relations & Regulatory Affairs and Head of Government Relations at Royal Dutch Shell between 2012 and 2017. His former roles with the Foreign and Commonwealth Office included British Ambassador Morocco & Mauritania (2017-2018), Deputy Head of Mission at the British Embassy in Egypt (2010-2012), Deputy Head of the Climate Change & Energy Department (2007-2009), and Deputy Head of the Counter Terrorism Department (2005-2007). He has lived or worked in a number of countries including Jordan, Kuwait, Yemen, Libya, Iraq, Saudi Arabia, Bahrain, and Argentina.

At Covington, Ambassador Reilly works closely with our global team of lawyers and investigators as well as over 100 former diplomats and senior government officials, with significant depth of experience in dealing with the types of complex problems that involve both legal and governmental institutions.

Ambassador Reilly started his career as a solicitor specialising in EU and commercial law but no longer practices as a solicitor.