What is a tax transparent fund?

A tax transparent fund (TTF) is a collective investment scheme established by the UK government. The purpose of it is to attract overseas investment into the country to strengthen its reputation as a leading financial centre.

Where have you heard about tax transparent funds?

Tax transparent funds were introduced in 2013. Despite the UK being Europe’s leading centre for fund management, its share of investment had fallen in the previous 10 years, which prompted then-Chancellor of the Exchequer, George Osborne, to take action.

What you need to know about tax transparent funds.

The introduction of TTFs has brought the UK in line with other European fund centres by creating a UK domiciled tax transparent vehicle for pooled funds.

Their attraction lies in their tax treatment. They're not subject to corporation, income or capital gains tax, so for UK tax purposes investors are treated as receiving income directly from the underlying assets of the fund.

This type of asset pooling appeals largely to multinational companies with pension funds in different locations.