It seems that many trustees and institutional managers still don’t appreciate the scale of the CCF market or the tax transparency, performance and governance advantages that CCFs deliver, particularly for tax exempt investors. CCFs have been around since 2003, when Ireland introduced them under the UCITS regulations.

Three key reasons for considering CCFs

There are three key reasons why institutional investors should consider CCFs for their portfolio: tax efficiency, good governance and economies of scale.

The tax transparency of CCFs means that tax exempt investors do not have to pay unnecessary withholding tax (WHT) on dividends. This in turn helps improve underlying investment performance by reducing the tax drag on portfolios. Trustees can therefore demonstrate that they are acting in the best interests of their beneficiaries by reducing costs, managing tax risks and optimising returns.

Because AMX can identify the beneficial owners in our CCFs, we are able to provide the evidence you need to justify appropriate tax refund claims to tax authorities. You can also demonstrate that you have clear procedures and processes to support the tax and investment decisions you take on behalf of your clients.

Finally, investment managers of pension schemes can reduce administrative costs by consolidating their pension fund clients into one CCF, so giving them a competitive advantage. We have written extensively about the benefits for CCFs for a range of investors, including Pension Funds, Life Insurance Companies and Sovereign Wealth Funds.

Our 'CCF compendium' provides links to all our CCF-related content including case studies and articles. Download it by clicking on the image above.

Please contact us if you have any questions about CCFs or improving tax-efficiency.