The Importance of Not Overblocking for UBIT

The Importance of Not Over Blocking for UBIT

Taxes play an important role in the structure of a fund. There are various categories of investors that have different tax implications which will impact the structure of a tax efficient fund. One such group of investors are tax-exempt investors and the planning around Unrelated Business Income Tax (“UBIT”). A common planning strategy for UBIT is placing a blocker corporation in the structure. If the blocker corporation blocks more than the UBIT, the tax-exempt investors will have their investment earnings reduced unnecessarily. […]

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