Tue, Mar 28, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Baronsmead warns asset managers of 'billion dollar' liability to Greek bonds

Monday, June 09, 2014
Opalesque Industry Update - Baronsmead Partners LLP, the specialist hedge fund insurance broker has today issued a warning to the non-domiciled fund management industry over tax liabilities, especially those with significant capital invested in Europe. Baronsmead has been closely monitoring the tax situation in Greece and across Europe advising clients on potential liabilities coming to the fore.

A note from the Hellenic Ministry of Finance last month announced that any gains derived by non-resident owners of government and corporate bonds would have to be declared to the Greek tax authorities and would be subject to a tax rate of 33% for legal entities and 20% for solitary investors.

Industry estimates predict that perhaps as much as $1 billion has been invested since 2012 in Greek corporate bonds and is therefore at risk from tax liability exposure. While fears over an immediate implementation seemed to have been calmed following a subsequent announcement on 15 May, there is still uncertainty around how the Greek tax authorities plan to deal with the tax liabilities in the longer term and as such investors remain concerned.

Baronsmead work with a number of fund managers who have expressed their concern with the situation in Greece as well as the potential for other European countries to follow suit. With strong ties to tax experts across Europe, Baronsmead believe that these exposures remain a genuine threat to investors.

Tax authorities across Europe have long since been wrestling with whether to pursue outstanding tax liabilities of non-resident funds but the potential for the authorities to impose a retroactive tax remains very real. It is entirely possible that the recent activity in Greece will stimulate other jurisdictions to decide on a path of action which potentially could leave the asset management industry with huge tax liabilities.

David Heathfield, Partner and General Counsel at Baronsmead, said:

“Having first proposed a retroactive tax for gains made on Greek corporate and government bonds, the Greek authorities then released a circular seemingly revoking the measure. It remains unclear but if that is Greece’s final position, the industry shouldn’t consider this a dodged bullet but a shot across the bows. The retroactive tax issue has been a dark cloud on the horizon for a few of years now and continues to create significant financial uncertainties for many of our clients.

We have been advising our clients that there are insurance options available to protect them against their potential exposures. If other jurisdictions do decide to clarify their intent, the tax liabilities facing the investment industry could be enormous. Now is the time for asset managers to prepare themselves and make sure they’re protected.”

Baronsmead

Press Release

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Hedge fund liquidations in 2016 surpass 2009 levels, new launches decline[more]

    Benedicte Gravrand, Opalesque Geneva: Even as the hedge fund industry's total assets exceeded the $3tln milestone last year, hedge fund liquidations increased. So much so that 2016 had the highest number of liquidations since 2008, claims the latest HFR Market Microstructure Report, re

  2. Hedge funds find no joy in macro as returns lag Trump rally[more]

    From Gulfnews.com: In 2017, macro hedge funds were expected to shine. So far? Not so much. It's been a far from impressive first two months for funds that trade around macroeconomic events. Discretionary funds rose just 0.3 per cent through February, according to Hedge Fund Research Inc., while the

  3. Strategies - Billionaire investor Marc Lasry shares how he's playing markets right now, Classic models are failing FX hedge funds desperate for return[more]

    Billionaire investor Marc Lasry shares how he's playing markets right now From CNBC.com: Buy on the prospect of deregulation. Sell on the enactment of deregulation. That's the strategy that billionaire investor Marc Lasry is implementing, according to an interview with CNBC in Las Vegas

  4. Opalesque Exclusive: Aberdeen makes the case for the lower mid-market[more]

    Bailey McCann, Opalesque New York: Aberdeen Asset Management has released a new paper focused on lower mid-market private equity. According to the paper, this segment of the private equity market is gaining popularity with private equity investors that are looking for multiple expansion and less

  5. Hedge funds await outcome of French elections, feel pinch on lower oil prices & weak dollar[more]

    Komfie Manalo, Opalesque Asia: Hedge funds felt the pinch of lower oil prices and weak U.S. dollar as the Lyxor Hedge Fund Index was marginally down as of the week ending 14 March, Lyxor Asset Management said in its Weekly Briefing. The Lyxor He