Cross Border Working: What's The Risk For UK Fund Managers?

In recent years flexible working has become commonplace across the private equity industry. This flexibility ranges from the occasional day working while on holiday to "commuter arrangements" where a manager might work from a London office Tuesday through Thursday, but then spend Friday through Monday working and living outside the UK.

Tax authorities have struggled to keep up with the pace of change. Rules that govern the tax implications of cross-border work require multi-lateral agreements, which take years to agree and implement. This has left us with a complex tax landscape for businesses to navigate.

What are the key risks for UK fund managers?

• Overseas permanent establishment (PE) risk for the UK fund manager: having an overseas PE could give rise to a requirement for the UK entity to file overseas tax returns. If the UK entity is an LLP, a requirement might arise for each LLP partner to file an overseas tax return to report a portion of the