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International
tax services for
private capital
2 International tax services for private capital
Global tax trends affect private capital
The relaxation of restrictions on foreign private investment, including
real estate, as well as lower interest rates/growth in developed
countries have prompted increased cross-border flow of private
capital for higher rates of return. It is no longer uncommon for a
large family office to manage a portfolio of investments in dozens
of countries across multiple continents. Private inbound investment
in the US remains strong due to relative stability and the high level
of liquidity offered by the US market. While private investment in
emerging countries recently has been on a downward trend, we
expect this to eventually reverse as countries continue to encourage
inflows of foreign capital and investors continue to seek diversified
portfolios, with returns hedged across multiple markets.
Private investments may be held directly through proprietary fund
structures or through third-party managed alternative investment
funds. As a result, our high-net-worth clients and their family
offices continue to identify cross-border tax and compliance issues
as the main area of risk due to a lack in centralized expertise and
resources. The tax issues affecting private capital in tax year 2017-
18 are interdependent with the issues and trends affecting the asset
management industry as a whole:
1.	 A major tax reform of the cross-border aspects of the US federal
income tax system is highly likely in the near term.
2.	 	Managed accounts/fund-of-one investing are increasingly popular
structures to use to mitigate investment manager risk.
3.	 There has been a continuous increase in volume and complexity
of the global compliance reporting requirements for nonresident
investors. This includes but is not limited to:
•	 Foreign Account Tax Compliance Act (FATCA) and FATCA-like
reporting
•	 Informational tax reporting for US investors (Forms 5471,
8621, 8858, etc.)
•	 Foreign Investment in Real Property Tax Act (FIRPTA) and
FIRPTA-like reporting for real estate investments
•	 	Documentation requirements for debt instruments issued by US
corporations
•	 	An increasing number of fund managers beginning to provide
more detailed data to facilitate tax reporting needs of non-US
investors — in some instances, this flashes out under-reporting
in prior years due to lack of information, which now needs to
be corrected
4.	 Some companies utilize multiple service providers to support tax
needs in multiple locations across the globe but lack in-house
expertise to oversee these resources:
•	 Multiple withholding agents (prime brokers, fund managers,
trustees) may have different approaches to administering
withholding taxes — this requires reconciliation and refund
filings.
•	 	Local law firms assisting with structuring, regulatory
compliance and transaction planning may not be aware of US
(or non-US) tax sensitivities and how legal planning impacts
all aspects of a high-net-worth individual’s tax planning and
compliance.
•	 	Family offices or CPA practitioners providing individual income
tax advice to principals and executives may lack expertise
pertaining to cross-border tax issues.
5.	 An exponential rise in global tax regulatory enforcement
is expected in 2017–18 as a result of the ongoing global
transparency and information exchange initiatives.
•	 We note a steady rise in crossover between immigration and
tax enforcement — customs and border agencies in multiple
jurisdictions have programs in place to share information on
frequent travelers with the tax authorities.
3Ernst & Young LLP
How we can help
EY International Tax Services (ITS) professionals in the US have
experience in providing tax planning and tax compliance services to
high-net-worth individuals and family offices. Below are examples of
services EY professionals provide:
•	 Initial and ongoing reviews of the individual’s/family’s tax posture to
identify rate reduction/planning opportunities
•	 Modeling for cross-border aspects of the pending US tax reform,
including improving foreign tax credit utilization and Section 962
election planning
•	 Planning for cross-border real estate investing (investment in and
outside of the US by US and non-US individuals and entities as well
as families with multiple residence/citizenship status)
•	 International tax aspects of estate and gift planning
•	 Taxable presence management for frequent business travelers and
individuals maintaining residences in multiple jurisdictions
•	 Global tax controversy management and support
•	 Planning for fund-of-one and managed accounts investing
•	 Planning for cross-border angel and private equity investments
and club deals, including structuring, due diligence and, if needed,
transfer pricing planning and assistance with obtaining advance tax
rulings
•	 Due diligence to facilitate investing in third-party managed funds
•	 Due diligence and international tax planning related to strategic
acquisitions of target companies
•	 Tax advisory services to determine tax implications of investing
in publicly or widely offered securities and cross-border debt,
including assistance with tax residency certifications, withholding
tax reconciliation and reclaims
•	 Mapping out cross-border international tax reporting requirements
and assistance with country-by-country reporting (CbCR)
compliance and the preparation of complex informational reporting
for US tax returns, including assistance with the preparation of form
side letters to request tax compliance information from investee
funds and portfolio companies
•	 FATCA assistance and documentation
•	 Planning for cross-border charitable giving and art collecting
•	 International tax aspects of the ownership and operation of aircraft
US ITS Private Capital
Ernst & Young LLP
Services network
EY’s Family Office practice
Bobby Stover
Partner
Americas Family Office Leader
Andrew Vinciguerra
Executive Director
Private Client Services, Family
Office Services
EY’s Private Client Services
John Cook
Partner
Private Client Services
Joseph Bulger
Principal
Private Client Services
Marianne Kayan
Senior Manager
Cross-Border Tax Planning Leader
for Private Clients
Jonny Lindroos
Partner
ITS Leader, Northeast New York
Chris Housman
Partner
ITS Leader, FSO New York
Seda Livian
Partner
Financial Services-Tax, New York
Irina Pisareva
Principal
ITS Wealth and Asset
Management, New York
Lucas Rachuba
Principal
ITS Wealth and Asset
Management, San Francisco
Martin Milner
Principal
National Tax, Washington, DC
Zsuzsanna Kadar
Executive Director
ITS Wealth and Asset
Management, New York
Alastair Campbell
Senior Manager
Northeast New York
Allen Stenger
Senior Manager
National Tax, Washington, DC
Maria Martinez Hernando
Senior Manager
National Tax, Washington, DC
Trae High
Senior Manager
ITS Wealth and Asset
Management, New York
Marina Baughman
Senior Manager
ITS Quantitative Services
Wealth and Asset Management,
Chicago
EY  |  Assurance | Tax | Transactions | Advisory
About EY
EY is a global leader in assurance, tax, transaction and
advisory services. The insights and quality services we
deliver help build trust and confidence in the capital markets
and in economies the world over. We develop outstanding
leaders who team to deliver on our promises to all of our
stakeholders. In so doing, we play a critical role in building a
better working world for our people, for our clients and for
our communities.
EY refers to the global organization, and may refer to one or
more, of the member firms of Ernst & Young Global Limited,
each of which is a separate legal entity. Ernst & Young Global
Limited, a UK company limited by guarantee, does not
provide services to clients. For more information about our
organization, please visit ey.com.
This news release has been issued by EYGM Limited, a
member of the global EY organization that also does not
provide any services to clients.
© 2017 EYGM Limited.
All Rights Reserved.
1703-2206726
SCORE: 01178-171Gbl
ED None
This material has been prepared for general informational purposes only and is
not intended to be relied upon as accounting, tax or other professional advice.
Please refer to your advisors for specific advice.
ey.com

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Tax Services For Private Capital

  • 2. 2 International tax services for private capital Global tax trends affect private capital The relaxation of restrictions on foreign private investment, including real estate, as well as lower interest rates/growth in developed countries have prompted increased cross-border flow of private capital for higher rates of return. It is no longer uncommon for a large family office to manage a portfolio of investments in dozens of countries across multiple continents. Private inbound investment in the US remains strong due to relative stability and the high level of liquidity offered by the US market. While private investment in emerging countries recently has been on a downward trend, we expect this to eventually reverse as countries continue to encourage inflows of foreign capital and investors continue to seek diversified portfolios, with returns hedged across multiple markets. Private investments may be held directly through proprietary fund structures or through third-party managed alternative investment funds. As a result, our high-net-worth clients and their family offices continue to identify cross-border tax and compliance issues as the main area of risk due to a lack in centralized expertise and resources. The tax issues affecting private capital in tax year 2017- 18 are interdependent with the issues and trends affecting the asset management industry as a whole: 1. A major tax reform of the cross-border aspects of the US federal income tax system is highly likely in the near term. 2. Managed accounts/fund-of-one investing are increasingly popular structures to use to mitigate investment manager risk. 3. There has been a continuous increase in volume and complexity of the global compliance reporting requirements for nonresident investors. This includes but is not limited to: • Foreign Account Tax Compliance Act (FATCA) and FATCA-like reporting • Informational tax reporting for US investors (Forms 5471, 8621, 8858, etc.) • Foreign Investment in Real Property Tax Act (FIRPTA) and FIRPTA-like reporting for real estate investments • Documentation requirements for debt instruments issued by US corporations • An increasing number of fund managers beginning to provide more detailed data to facilitate tax reporting needs of non-US investors — in some instances, this flashes out under-reporting in prior years due to lack of information, which now needs to be corrected 4. Some companies utilize multiple service providers to support tax needs in multiple locations across the globe but lack in-house expertise to oversee these resources: • Multiple withholding agents (prime brokers, fund managers, trustees) may have different approaches to administering withholding taxes — this requires reconciliation and refund filings. • Local law firms assisting with structuring, regulatory compliance and transaction planning may not be aware of US (or non-US) tax sensitivities and how legal planning impacts all aspects of a high-net-worth individual’s tax planning and compliance. • Family offices or CPA practitioners providing individual income tax advice to principals and executives may lack expertise pertaining to cross-border tax issues. 5. An exponential rise in global tax regulatory enforcement is expected in 2017–18 as a result of the ongoing global transparency and information exchange initiatives. • We note a steady rise in crossover between immigration and tax enforcement — customs and border agencies in multiple jurisdictions have programs in place to share information on frequent travelers with the tax authorities.
  • 3. 3Ernst & Young LLP How we can help EY International Tax Services (ITS) professionals in the US have experience in providing tax planning and tax compliance services to high-net-worth individuals and family offices. Below are examples of services EY professionals provide: • Initial and ongoing reviews of the individual’s/family’s tax posture to identify rate reduction/planning opportunities • Modeling for cross-border aspects of the pending US tax reform, including improving foreign tax credit utilization and Section 962 election planning • Planning for cross-border real estate investing (investment in and outside of the US by US and non-US individuals and entities as well as families with multiple residence/citizenship status) • International tax aspects of estate and gift planning • Taxable presence management for frequent business travelers and individuals maintaining residences in multiple jurisdictions • Global tax controversy management and support • Planning for fund-of-one and managed accounts investing • Planning for cross-border angel and private equity investments and club deals, including structuring, due diligence and, if needed, transfer pricing planning and assistance with obtaining advance tax rulings • Due diligence to facilitate investing in third-party managed funds • Due diligence and international tax planning related to strategic acquisitions of target companies • Tax advisory services to determine tax implications of investing in publicly or widely offered securities and cross-border debt, including assistance with tax residency certifications, withholding tax reconciliation and reclaims • Mapping out cross-border international tax reporting requirements and assistance with country-by-country reporting (CbCR) compliance and the preparation of complex informational reporting for US tax returns, including assistance with the preparation of form side letters to request tax compliance information from investee funds and portfolio companies • FATCA assistance and documentation • Planning for cross-border charitable giving and art collecting • International tax aspects of the ownership and operation of aircraft US ITS Private Capital Ernst & Young LLP Services network EY’s Family Office practice Bobby Stover Partner Americas Family Office Leader Andrew Vinciguerra Executive Director Private Client Services, Family Office Services EY’s Private Client Services John Cook Partner Private Client Services Joseph Bulger Principal Private Client Services Marianne Kayan Senior Manager Cross-Border Tax Planning Leader for Private Clients Jonny Lindroos Partner ITS Leader, Northeast New York Chris Housman Partner ITS Leader, FSO New York Seda Livian Partner Financial Services-Tax, New York Irina Pisareva Principal ITS Wealth and Asset Management, New York Lucas Rachuba Principal ITS Wealth and Asset Management, San Francisco Martin Milner Principal National Tax, Washington, DC Zsuzsanna Kadar Executive Director ITS Wealth and Asset Management, New York Alastair Campbell Senior Manager Northeast New York Allen Stenger Senior Manager National Tax, Washington, DC Maria Martinez Hernando Senior Manager National Tax, Washington, DC Trae High Senior Manager ITS Wealth and Asset Management, New York Marina Baughman Senior Manager ITS Quantitative Services Wealth and Asset Management, Chicago
  • 4. EY  |  Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients. © 2017 EYGM Limited. All Rights Reserved. 1703-2206726 SCORE: 01178-171Gbl ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com