EEA Life Settlements Fund PCC
Limited (the “Company”)
Last year the Internal Revenue
Service (IRS) in the US
announced a clarification of the taxation of gains arising from the
maturity of life policies. This
clarification had the effect of establishing a withholding tax
liability for the Company’s subsidiary.
As of today, as a response to the
clarification issued by the IRS, the directors have restructured the
Company’s subsidiaries to mitigate its tax liabilities.
Full details of this new
structure are available in the Offering Memorandum which may be found
The Company has been making a
provision for these liabilities in the published net asset value per
share since May 2009 and the performance has been largely unaffected
and is still above the benchmark for the last 12 months. Also, the
directors are making no alteration to the Fund’s 8% p.a. benchmark,
nor to its 9-10% p.a. performance target.
This clarification is welcomed as it
has allowed the Company’s directors to structure the Company’s
business so that it can maintain its impressive track record.
Important Information for UK
In line with the changes recently
instigated by the UK HMRC the Company’s tax advisers have indicated
that the Company will qualify for the new reporting funds status.
This new regime replaces the
previous system of applying for UK
distributor status. The
directors are particularly pleased with this outcome since it is
generally considered advantageous for UK investors for tax reasons,
although investors should always consult their adviser for individual
Investors based outside the UK
are not affected by this change.
As a consequence of this change the
Company is amending its accounting year end to 31 December in each
year to take advantage of the new reporting funds regime at the
earliest opportunity. A
set of audited financial statements for the period from 1 July 2009 to
31 December 2009 is being prepared and will be sent to shareholders by
30 June 2010.
The Company’s cells (other than the
Euro Cells) have been certified as distributing funds under the
previous rules for the year ended 30 June 2009. A
final application for distributor status for these cells will be made
for the period to 31 December 2009 under the transitional rules, and
the Company will shortly be making its Cells’ application for
recognition as reporting funds.
Tel: +44 (0)1481 723450
1 March 2010