Taxation in PE/HFs

General thoughts on PE/HF taxation as an employee -- how flexible are PE or HF shops to permit their employees to move for tax purposes, whilst keeping their job? Speaking from a UK perspective, it is quite popular to move to Switzerland or the Channel Islands for tax purposes, especially since the job can easily be done from there and flights between most places in Western Europe are 2 hours at most. From a US perspective, moving state can often be quite tax-efficient too. Of course for those happy to move further, the Gulf & Singapore can offer even more favourable tax treatment.

Would a PE fund let a Partner do so, for example? Or a HF let a PM do so? With greater scrutiny and focus on capital / investment taxation in the UK/US, I think that there will be more PE/HF professionals asking the same question, given some very favourable treatment abroad/out of state.

 

Not investment/tax advice. On the HF side, firms like MLP, Citadel have given flexibility, allowing PMs to move to jurisdictions with more favourable tax regimes, such as Switzerland, the Channel Islands, and states within the US with no state income tax. Ultimately, good tax, good infra and a decent COL. Plus the fees they generate vs compliance is almost nil. Know of 1-2 pods first hand in the process of (almost) entirely working out of Abu Dhabi

 

Interesting. I think this could become more frequent if the tax environment between the world's financial hubs (predominantly New York and London) continues to diverge from these countries / states / cities.

Keen to hear everyone else's thoughts though.

 

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