Scottish Value Management's (SVM) plans to move its range of funds onshore look likely to be delayed...
Scottish Value Management's (SVM) plans to move its range of funds onshore look likely to be delayed by a potential £0.5m tax liability, writes Fiona Henderson.
The group had been looking to move its Dublin-based range onshore in the UK by the end of the year.
Sam Batcharj, business development director at the group, said: 'Initially, our thoughts were to transfer the existing range onshore but this would incur around £0.5m in tax costs. We do not want to pass this cost onto the investors, so we are looking at other ways around the issue.'
According to Batcharj, it is possible to appeal against the £0.5m cost of transferring assets onshore. He said: 'We can appeal to the stamp office that we are simply re-domiciling and that this should not incur such costs. However, even if the appeal gains a favourable result, the process can take a further six months to a year.'
As an alternative, the group is now looking at setting up a separate unit trust company onshore, rather than transferring its assets.
Batcharj said: 'Once we do this we could then take over the offshore range. At a later date, we would look to convert this onshore range into an Oeic structure.
'We are currently in talks with the FSA and the tax people in order to iron out the finer details of the move.'
Batcharj said this may well delay the group's original plans.
He added: 'Currently, it is possible for UK investors to subscribe to any of our funds but it has been difficult to get noticed as we are included in offshore performance tables rather than compared against our main competitors domiciled in the UK.
'Ideally, investors would recognise that the underlying product is a fund under the same legislation as UK Oeics, the only difference being that it is domiciled in Dublin. However, a move to the UK will enable us to be ranked against our competitors and make us more noticeable to UK investors.'
The group, which is distributed through Canada Life, is also in talks with a Scottish life office and is in the frame to link to its distribution.
Batcharj said: 'A lot hinges on our suitability as an onshore company to be added to the range.'
The group is looking to recruit two fund managers and add to its sales and marketing team.
Batcharj said: 'We are always looking at opportunities but are not necessarily launching new funds. We will have a sales force going out in the next year or so.'
SVM recently altered the objective of the Scottish Value Trust to allow up to a third to be invested in hedge funds. Colin McLean and Donald Robertson run the portfolio and McLean also manages the group's hedge fund, which qualifies him to expose the trust to the market, said Batcharj.
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