Tory treasurer: Fund admin should be onshore

The UK should relax its tax laws in order to compete with offshore tax havens, urged the Conservative party treasurer.

Taxes on the UK’s invisible earnings should be cut so that GPs don’t need to domicile funds offshore – in effect bringing the fund administration industry back to the mainland, said the right-leaning Tory party treasurer Lord Fink last week. 

The former chief executive and chairman of hedge fund titan Man Group said the UK would not lose any tax by adopting the proposal as the UK does not tax limited partnerships. 

“I don't see why the UK should not compete for jobs that at present are going to the Cayman Islands. I lobbied George Osborne when the Tories were in opposition. I have long felt that the British government loses jobs to tax havens by allowing the Revenue to have these rather archaic rules,” Fink told UK daily the Guardian.

One London-based lawyer summarised the Tory leader's position by saying the proposal would bring a flourishing offshore fund administration industry back onshore, subject to UK oversight and scrutiny.

The hedge fund guru made his comments after a Guardian investigation revealed that 68 MPs and peers, who are able to influence British tax laws, are either directors or non-executive of firms with ties to tax havens.

One hurdle that the UK would have to overcome, if HMRC was persuaded to adopt this measure, would be convincing the European Union. “If the UK were to introduce a tax regime where no tax was payable they might need to get EU permission and there would be a big question mark over whether the commission would be willing to do that at all,” said the lawyer.

For more information on tax havens make sure to read a copy of PE Manager’s fund domicile supplement next month.