The Swedish tax agency has recognized the tax-transparency of Northern Trust’s cross border asset pooling vehicle. This makes Northern Trust the first custodian to work with a client to secure reduced withholding tax rates for Swedish investors holding equities through a tax-transparent, cross-border asset-pooling vehicle.
Investing in an Irish-domiciled Common Contractual Fund (CCF) could potentially increase total return for Swedish investors via such vehicles by about 50 basis points a year, according to Northern Trust’s own calculations. This could enhance returns by as much as $82 million on a $1 billion portfolio invested in broad market indices over a 10-year period, added Northern Trust.
Confirmation of tax-transparency by tax authorities is pivotal for cross-border pooling as it enables investors in a pooled investment fund to obtain the same withholding tax rate as if they had invested directly in equities.
(JDC)