The 120 page report, Analysis of the tax implications of
UCITS IV , states it is important that the conversion of a
UCITS into a feeder fund does not have adverse tax consequences
for the fund or investors.
Peter de Proft
Under UCITS IV, a feeder fund will be allowed to invest its
assets in another fund, a master fund. As it currently stands,
certain member states levy withholding taxes on cross-border
dividend distributions to foreign feeders, or impose tax on
redemptions in the country where the master fund is
The report adds: "Investing via a master fund could give
rise to additional tax charges. If a country levies withholding
tax on distributions from a master fund to a feeder fund, or a
capital gains tax when the feeder fund...