Photo of Catherine Sear

Catherine Sear is a partner in the Tax Department and a member of the Private Funds Group. She specializes in the tax aspects of structuring and investing in private investment funds including private equity, venture capital, infrastructure, debt and real estate funds, funds of funds, secondary funds and other investment partnerships.

She advises sponsors and investors on a wide variety of UK and international tax issues related to private investment funds and their operations, including tax aspects of:

  • structuring and raising private investment funds
  • structuring carried interest and executive coinvestment arrangements
  • restructuring existing private investment funds
  • establishment and operation of fund management businesses
  • investments by institutional investors in private funds
  • separate accounts for institutional investors, acting for both fund managers and investors
  • secondary transactions, both buy-side and sell-side
  • coinvestment structures

Catherine advises on a broad range of UK tax issues including VAT, employment tax, capital gains tax in relation to partnerships, withholding taxes and tax rules relating to carried interest. She also has considerable knowledge of international tax issues arising for investment structures with a cross-border dimension and experience with multijurisdictional fund management teams.

The recent decision of the First-tier Tribunal (FTT) in BlueCrest Capital Management (UK) LLP v HMRC (29 June 2022) is the first time the UK’s salaried member rules (the Rules) have been considered in the context of an asset management limited liability partnership (LLP). BlueCrest is engaged in providing hedge fund investment management services. In summary, the FTT found that certain of BlueCrest’s members who were responsible for managing significant investment portfolios had ‘significant influence’ over the affairs of the LLP, irrespective of whether that influence on a financial level amounted to managerial influence over the whole of the LLP’s affairs, such that those members were not salaried members (but that other members who were not engaged in portfolio management did not have significant influence for these purposes, as explained below).

 The decision in respect of the significant influence condition for portfolio managers will be welcomed by asset management LLPs. However, it is generally expected that HMRC will appeal the decision, particularly given that it appears to be at odds with HMRC’s approach, as set out in the HMRC Partnership Manual, that only members involved in the top level management of an LLP should treated as having significant influence over its affairs.

UK General Tax Developments

HMRC updates guidance on what constitutes “ordinary share capital”

Following the decision by the First-tier Tribunal (FTT) in Warshaw V HMRC, reported in our UK tax blog earlier this month, HMRC has updated its guidance on what constitutes “ordinary share capital” for the

Welcome to the October edition of the Proskauer UK Tax Round Up. It has been a reasonably busy month, with a number of interesting UK cases being reported as well as further clarity from the CJEU in relation to VAT. The Autumn Budget will be presented later today and the