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No tax relief for hedge funds?
The business of a hedge fund has been declared to be a collective investment scheme 'CIS' in terms of the Collective Investment Schemes Control Act 'CISCA'. Taxand South Africa discusses further.
A person that conducts the business of a hedge fund must, within 6 months from 1 April 2015, lodge with the registrar of the Financial Services Board an application for registration as a manager to operate a hedge fund in accordance with section 42 of CISCA.
Hedge funds may comply with the CISCA provisions in one of the following ways:
- By transferring their assets to a registered portfolio of a new scheme established by an approved CISCA manager which scheme would constitute a CIS trust arrangement
- By transferring their assets to a registered portfolio of a new scheme established by an approved CISCA manager which scheme would constitute an en commandite partnership
- In the case of a hedge fund that is currently constituted as an en commandite partnership by retaining such partnership and appointing an approved CISCA manager and registering the partnership as a new scheme
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