A Practical Overview of the UK QAHC Regime

Overview

The Qualifying Asset Holding Company (QAHC) regime was introduced in 2022 to make the UK a more competitive destination for fund holding vehicles, successfully competing with Irish and Luxembourg holding structures commonly used across private capital structures.

The QAHC regime is an elective UK tax framework that can deliver a tax neutral asset holding structure for funds investing in a broad range of investment strategies, subject to satisfying strict eligibility conditions and on-going reporting requirements.

Eligibility

Core eligibility requires the asset holding company to be UK tax resident and to carry on an investment business. The regime excludes listed companies, UK REITs and securitisation vehicles from entry.

In practice, one of the key conditions is the ownership condition. Very broadly, the ownership condition tests whether ‘relevant interests’ in the vehicle are held more than 30% by non-qualifying investors. Testing the ownership condition is a detailed exercise and may require some degree of monitoring but should generally be capable of being satisfied by widely held funds (or those being marketed to a broader range of investors).

Key benefits

Tax neutrality on gains - Gains on the disposal of shares and certain non‑UK land held by a QAHC can be exempt from UK corporation tax, aligning investor outcomes with direct investment.

Exemption from UK withholding tax on interest - Interest payments made by a QAHC to investors are exempt from UK withholding tax, improving cash flow and reducing administrative complexity in cross‑border structures.

Capital treatment of certain distributions - Share buybacks and similar distributions may be treated as capital rather than income, which can provide more favourable tax treatment for investors.

Access to the UK’s double tax treaty network - QAHCs can leverage the UK’s extensive treaty network to reduce withholding taxes on dividends, interest, and gains arising in other jurisdictions.

Operational and compliance requirements

Entry into the regime requires a notification to HMRC and electing companies must submit an annual HMRC information return and retain supporting records (estimated market value of assets, ownership evidence and minutes) to demonstrate ongoing eligibility.

Further to ongoing reporting requirements, demonstrating UK substance and governance is important, especially where the QAHC is non-UK incorporated:

Does the board/QAHC have UK‑resident directors?

Are board meetings regularly held?

Are decisions supported by clear, timely documentation including quality minutes, resolutions, and supporting papers at the time decisions are made?

As a side note, where an existing SPV enters into the QAHC regime, it is important to understand whether tax charges could be triggered. Further to this, a new accounting period commences upon conversion which may have tax return implications for the year of conversion.

Practical considerations for fund managers

Substance and governance: adopt board practices and documentation that evidence genuine UK management and control.

Ownership monitoring: maintain, broadly, shareholder and creditor registers and controls to ensure the >70% qualifying ownership outcome is preserved.

Reporting readiness: prepare to complete the HMRC information return annually and retain information relating to (i) estimated value of assets, (ii) proceeds arising from disposals and (iii) payments made by the QAHC to its investors.

Structuring choices: the regime can be used for new incorporations or existing UK tax‑resident vehicles, but each route requires tailored tax and operational due diligence.

How we help
Belasko is a trusted partner for fund managers, offering comprehensive fund administration services to UK and international vehicles, including QAHCs. Our team provides:

Full lifecycle administration: From incorporation to ongoing governance, compliance, and reporting.

Investor reporting and accounting: Accurate, timely, and investor-ready reporting to help maintain transparency and confidence.

Regulatory and tax compliance: Ensuring your vehicle meets UK tax rules, qualifying criteria, and reporting obligations.

Tailored support: A flexible approach to fit your structure and strategic needs.

Once established, our team is perfectly placed to manage all governance, administration, accounting, and reporting requirements, ensuring your QAHC operates smoothly and remains fully compliant.

If you’d like to explore how Belasko can support you, please get in touch with me directly.

[email protected]

Thank you to Mohammed Natha and Matthew Durward-Thomas from the Akin Gump tax team for collaborating on this piece.

Sources

Finance Act 2022, Schedule 2: Qualifying asset holding companies — Legislation.gov.uk: https://www.legislation.gov.uk/ukpga/2022/3/schedule/2/enacted

New tax regime for asset holding companies (AHCs) — GOV.UK policy paper: https://www.gov.uk/government/publications/new-tax-regime-for-asset-holding-companies-ahcs/new-tax-regime-for-asset-holding-companies-ahcs

IFM40000 — Qualifying Asset Holding Companies: contents — HMRC Internal Manual: https://www.gov.uk/hmrc-internal-manuals/investment-funds/ifm40000

Make a qualifying asset holding company (QAHC) notification to HMRC — GOV.UK guidance: https://www.gov.uk/guidance/make-a-qualifying-asset-holding-company-qahc-notification-to-hmrc