The Treasury has published a call for input document as its review of the UK funds regime continues.

HM Treasury has launched the latest stage of its review into the UK funds regime, a process initially announced as part of the Spring 2020 Budget, calling for industry stakeholders to submit their views by the 20 April 2021 deadline. The call for input asks respondents how the market can be reformed, which reforms should be taken forward and how these should be prioritised.


The overarching objective of the review is to identify how the UK can become a more attractive place to set up, manage and administer funds.

Specifically, the Treasury wants to understand how the taxation and regulation of funds can or could be reformed and improved to help in achieving this goal. Following analysis of the responses to the call for input received from stakeholders, specific reform proposals will be consulted upon.


Key areas of concern relating to the taxation of funds are (i) any lack of neutrality in the taxation of different types of funds; (ii) any barriers and complexities associated with the taxation of real estate investment trusts (REITs); (iii) any issues around international tax treaties; and (iv) whether a change in the taxation of UK limited partnerships would make these a more attractive vehicle for investors.


On regulation, the Government wants stakeholders to consider (i) the benefits and relevance of fund authorisation at home and abroad; (ii) whether the authorisation process, established through legislation, can be reformed, improving speed to market; (iii) whether the qualified investor scheme can be made more attractive; and (iv) any further improvements in operational efficiency.

The call for input does show that the Government is willing to bring wide-ranging, real change to the market in order to maintain the UK's competitive position in a post-Brexit, post-passporting world.

Funds Finance

Participants in funds finance transactions will have a keen interest in HM Treasury's call for input and subsequent consultation. As we have written about here, Scottish limited partnerships are unique and flexible entities commonly used in fund structures. Unlike limited partnerships constituted elsewhere in the UK, Scottish limited partnerships have separate legal personality, can be used as a primary fund vehicle or as a carried interest or feeder fund, and can also act as a general or limited partner in other limited partnerships within the fund structure.

As experienced advisors in domestic and global funds structures we support proposals for enhancements to the attractiveness of the UK funds regime for investors.


Alan Knowles


Andrew Thomson

Trainee Solicitor