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Hipgnosis becomes an investment trust

Hipgnosis Songs Fund: SONG

Hipgnosis becomes an investment trust – The board of Hipgnosis Songs Fund Limited has announced that, as noted in the prospectus dated 21 January 2021, the company applied to HMRC for approval  as an investment trust company and that such approval has been granted. Accordingly, the company’s conversion to an investment trust company will take effect from today. The company will be treated as being resident in the UK for tax purposes from such date. With effect from this change, the company will cease to be a Guernsey tax exempt vehicle under The Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989, as amended.

The Company applied to become an investment trust company to mitigate the recently increased scope of Guernsey’s economic substance rules, which now apply to Guernsey entities (including Guernsey tax exempt vehicles) that are self-managed collective investment schemes.

In respect of each accounting period for which the company is approved by HMRC as an investment trust, the company will be exempt from UK taxation on its chargeable gains. The company will, however, (subject to what follows) be liable to UK corporation tax on its income in the normal way. The company should, in practice, be exempt from UK corporation tax on dividend income received, provided that such dividends (whether from UK or non UK companies) fall within one of the “exempt classes” in Part 9A of the Corporation Tax Act 2009.

Details of the tax implications for UK resident shareholders are outlined in paragraph 2 of Part VI (Taxation) of the prospectus, and details of the ongoing conditions for investment trust companies are outlined in paragraphs 1.5 and 1.6 of Paragraph VII (Additional Information) of the prospectus. If shareholders are in any doubt about their tax position, they should consult their professional adviser.

SONG : Hipgnosis becomes an investment trust

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