Michael Alliston
Michael Alliston is a tax lawyer based in London. He advises on a wide range of corporate tax matters, including M&A, corporate reorganizations, capital markets transactions and financings.
Michael's practice comprises a mix of transactional and stand-alone advisory work. He assists companies across a wide variety of sectors, including energy, infrastructure, financial institutions, funds, real estate and transport.
Michael has particular experience advising M&A and tax risk underwriters.
Practice Area
Panel
- Contributing Author
9 Contributions by Michael Alliston
PRACTICE NOTES
Investment trust liquidations and section 110 IA 1986 reconstructions: steps, maintaining approved status, transfer taxes, HMRC clearances, and tax treatment of the trust and investors
Investments trusts
Investment trusts are typically organised as companies with no fixed lifespan. As a result, investors generally realise their holding only by selling shares on the relevant stock exchange. The market price may not fully reflect the net asset value (NAV) of the underlying investments and, in many instances, shares trade at a discount to NAV.
To help investors realise full NAV, some trusts are established with a fixed life, meaning the company will be liquidated/wound up on a pre-determined date.
Alternatively, liquidation/winding-up can occur in response to shareholder demand, with realised assets distributed to investors even though this was not anticipated at inception.
When a winding-up is proposed, there is often a parallel reconstruction, giving investors the option to roll-over their investment into a new vehicle...
Tax
PRACTICE NOTES
Non-reporting offshore funds under the Offshore Funds (Tax) Regulations 2009: UK tax on OIGs, computations, status-change elections, exceptions, CGT interaction and distribution treatment
STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime
Finance Act 2025 (FA 2025), which received Royal Assent on 20 March 2025, delivers the repeal of the remittance basis and introduces a residence-based system with effect from 6 April 2025. FA 2025 also replaces domicile as the principal criterion for determining exposure to inheritance tax.
Updates to the rules for determining excluded property status
Abolition of the protected settlements status for offshore trusts
Changes to overseas workday relief
For details on these measures, see: Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26.
A non-reporting offshore fund is any offshore fund that does not have reporting fund status for a particular period of account. For what constitutes an offshore fund, see Practice Note: Tax and offshore funds—what is an offshore fund?. For information on reporting funds, see Practice Notes: Tax and offshore funds—the reporting fund regime and Tax and offshore funds—requirements of the reporting fund regime...
Tax
PRACTICE NOTES
Offshore reporting funds (UK): minor and serious breaches, correction thresholds, reporting failures, HMRC exclusion notices, appeals and voluntary exit
In order to keep reporting fund status, a reporting fund must meet ongoing obligations laid out in Part 3 of the Offshore Funds (Tax) Regulations 2009, SI 2009/3001 (the Offshore Funds Regulations). These cover the fund’s accounting policy, the duty to compute ‘reportable income’, and the obligation to provide reports and specified information to investors and HMRC. Observing these obligations is considered essential to ensure the reporting fund regime operates as intended. Because offshore funds are otherwise outside HMRC’s jurisdiction (by virtue of being ‘offshore’), the offshore funds legislation equips HMRC with sanctions to deal with any failures to meet these obligations. Where a reporting fund falls short of the stipulated requirements, the aim is that any outcome should be fair and proportionate. Failures are therefore categorised as ‘minor’ or ‘serious’. Where a reporting fund commits a ‘serious’ failure of the regulations’ requirements, or accumulates ‘minor’ failures within a given period, the fund can be removed from the reporting fund regime. For more detail on the reporting and other requirements of the reporting fund, compliance underpins the regime’s intended operation, and HMRC may apply sanctions under the offshore funds legislation to address such breaches, with outcomes intended to remain reasonable...
Tax
PRACTICE NOTES
UK investment trusts: breach classification, HMRC notification duties and loss or reinstatement of approved status under CTA 2010 and the Investment Trust Regulations (SI 2011/2999)
To secure, and then retain, approval as an investment trust for UK tax, a company must meet specific eligibility tests set out in the Corporation Tax Act 2010 (CTA 2010), and comply with a range of continuing obligations under the Investment Trust (Approved Companies) Tax Regulations, SI 2011/2999 (the Investment Trust Regulations). For further detail on those tests and obligations, see Practice Note: Tax and investment trusts—what are investment trusts? This Practice Note explains the consequences where an approved investment trust breaches any of those eligibility tests or does not satisfy one or more of the continuing obligations. It also describes the position where an approved investment trust submits returns on the footing that it is not an approved investment trust for tax purposes. For guidance on applying for investment trust approval, see Practice Note: Tax and investment trusts—applying for HMRC approval. For the taxation of approved investment trusts and their investors, see Practice Note: Tax and investment trusts—tax treatment of the fund and its investors.
Breaches of eligibility conditions vs breaches of ongoing requirements
Breaches of the CTA 2010 eligibility criteria and breaches of the Investment Trust Regulations’ ongoing requirements are dealt with in different ways by HMRC accordingly...
Tax
PRACTICE NOTES
UK investment trusts: chargeable gains exemption; income rules (white list, loan relationships, derivatives); interest streaming; offshore funds; management expenses; VAT - tax treatment of funds and investors
An investment trust is a collective investment vehicle structured as a quoted UK tax-resident company. Despite the name, it is not a trust in legal terms. Where HMRC approval is obtained, investment trusts benefit from exemption from tax on chargeable gains. For further detail on what investment trusts are, as well as the qualifying conditions and ongoing obligations they must meet, see Practice Note: Tax and investment trusts—what are investment trusts?
This Practice Note sets out the specific tax rules for approved investment trusts in relation to:
tax on chargeable gains
tax on income, in particular the treatment of:
distributions received
trading versus investment transactions
loan relationships and derivative contracts
holdings in non-reporting offshore funds
management expenses
the elective streaming regime under which an approved investment trust may designate a distribution to investors as interest
VAT
Unless indicated otherwise, references in this Practice Note to an investment trust mean a company approved by HMRC as an investment trust.
Tax on chargeable gains
Approved investment trusts are exempt from corporation tax on chargeable gains...
Tax
PRACTICE NOTES
UK investment trusts: definition, HMRC approval criteria and ongoing requirements for favourable tax status
Investment trust
An investment trust is a collective investment vehicle structured as a listed, UK tax-resident public limited company. Despite the label, in legal terms an investment trust is a company rather than a trust. The expression stems from a period when these vehicles were established as trusts, but they later converted to limited companies and therefore are no longer trusts in any legal sense. Where HMRC grants approval to an investment trust, it can access certain UK tax advantages. This Practice Note sets out the eligibility criteria that must be met for a fund to obtain approval as an investment trust for UK tax purposes. It also addresses the continuing requirements that must be satisfied in every accounting period for which the vehicle holds that approval...
Tax
PRACTICE NOTES
UK Offshore Funds (Tax) Regulations 2009: reporting fund regime—accounting policies, reportable income (capital, special income, equalisation), investor/HMRC reporting, and constant NAV exception
Reporting fund regime
UK holders in ‘reporting’ offshore funds are assessed to tax each year on their share of the fund’s ‘reported income’, whether this is distributed or retained. This permits them to obtain capital gains treatment when they dispose of their holding. By contrast, when UK investors in ‘non-reporting’ offshore funds realise gains on disposals of their interests, those gains are taxed as income rather than as capital gains; such amounts are termed ‘offshore income gains’. Offshore funds must apply for, and be granted, reporting fund status.
For who is eligible and how to apply for reporting fund status, see Practice Note: Tax and offshore funds—the reporting fund regime.
For details on non-reporting offshore funds and how their investors are taxed, see Practice Note: Tax and offshore funds—non-reporting funds.
For an outline of what constitutes an offshore fund, see Practice Note: Tax and offshore funds—what is an offshore fund?
In broad terms, reporting offshore funds ‘report’ income to UK investors for each ‘reporting period’, enabling those investors to complete their tax returns with their proportionate share of that reportable income. Reporting funds also have certain obligations to provide information...
Tax
PRACTICE NOTES
UK offshore funds tax: characteristics-based definition of an offshore fund—mutual fund conditions A–F, exceptions for closed-ended funds, entity types and umbrella arrangements
Background to the UK’s offshore funds rules
Targeted tax legislation for offshore funds first appeared in 1984. Up to that point, UK investors in non‑UK investment vehicles could accumulate income offshore and, when their holdings were realised (for example on a sale of their interest), the proceeds were charged at capital gains rates rather than income tax rates. The 1984 'offshore funds' regime addressed this position by treating as income any gains arising on disposals of material interests in 'offshore funds'. For tax purposes, the notion of an 'offshore fund' was anchored to a regulatory definition for the sector. Certain provisions offered an exception from that treatment where a particular offshore fund distributed at least 85% of its income and UK‑equivalent profits to investors each period. Where a fund made such distributions, an investor's disposal of their interest continued to receive capital gains tax treatment on exit. The intention behind the 1984 rules was to secure consistent tax outcomes for interests held by UK investors in offshore funds on the one hand and in UK funds on the other. The UK tax framework for offshore funds was then significantly revised across the regime in 2009...
Tax
PRACTICE NOTES
UK offshore funds: reporting fund regime—eligibility, application, investor tax effects, constant NAV rules, and genuine diversity of ownership clearance
‘Reporting fund’
A ‘reporting fund’ is an offshore fund that has obtained reporting fund approval and has not departed the regime, whether voluntarily or by exclusion. In essence, UK investors in such funds are taxed each year on their portion of the fund’s reported income, irrespective of whether that income is paid out or retained. This allows capital gains treatment to apply when they dispose of their interest. For offshore funds that do not report income in this manner (‘non-reporting funds’), disposals by investors are taxed as income. The governing provisions are in Part 3 of the Offshore Funds (Tax) Regulations 2009, SI 2009/3001 (the Offshore Funds Regulations). For the UK tax definition of an ‘offshore fund’, see Practice Note: Tax and offshore funds—what is an offshore fund?
This Practice Note covers:
the eligibility criteria and application process for the reporting fund regime
the consequences of entering the reporting fund regime
a brief overview of the continuing obligations and requirements for funds within the reporting regime—for more on a reporting fund’s ongoing duties and obligations, including...
Tax
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