In 2020, the U.K. government published a consultation on the tax treatment of vehicles through which alternative funds hold their assets (Consultation). The outcome of the Consultation – with the benefit of subsequent dialogue between Her Majesty’s Revenue & Customs (HMRC) and industry representatives – is a new elective regime for the taxation of certain kinds of qualifying asset holding companies (QAHCs). The new rules, which have effect from April 1, 2022, are accompanied by guidance published by HMRC in its Investment Funds Manual. In a guest article, Cleary Gottlieb partners Richard Sultman and Michael James cover the scope of the QAHC regime, highlighting the main features of the companies that can qualify and the benefits available to them. The article also identifies key considerations for sponsors thinking of using the new regime, along with some of the main issues that remain open. Further, it shares insights on how fund managers can proceed under the new regime and, accordingly, what impact it might have. For more on the Consultation, see “Alternative Funds and the U.K. Asset Holding Company Consultation: Best of Breed, or Slow Out of the Gate” (Sep. 1, 2020).