Investment Fund Analysis & Strategy
PwC
Management investment plan – Carried interest
-
Do
ManCo
Manager/
GP
Investors /
LPs
Carry
Dividends /
liquidation proceeds
Dividends /
liquidation proceeds i
I
Fund
LP
Master
HoldCo
Targets
Feeder
Carried interest
Typical management investment plan structuring
Carried interest / Co-investment / Stock-options (difficult to apply)
Carried interest
.
Main issue: tax qualification of Cl income
No specific regime - General Belgian tax rules apply (employment
income vs. investment income)
Possibilities for structuring the Cl:
Via a Master Holdco / via the Fund (transparency)
Direct holding / holding through an intermediate carry vehicle
O Direct holding by the Managers / indirect by their ManCos
Generally, not considered as part of the normal management of
private assets
•
Ruling practice:
ManCo / opaque carry vehicle to be set up
О • Initial investment at fair market value
O
。
Recent developments: risk that part of the Cl will be taxed at
progressive tax rates when structured on transparent fund
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