Recent Legislation May Impact Offshore Hedge Fund Deferral Arrangements
- Topics:
- Investment and Capital Markets
- Tags:
- Arrangement,
- Finance,
- Financial Services,
- Goodwin Procter,
- Hedge Fund,
- Investment,
- Offshore,
- Statute
- Source:
- Goodwin Procter
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Overview: Congress enacted Section 409A of the Internal Revenue Code as part of the American Jobs Creation Act of 2004 to restrict certain deferred compensation arrangements. The Internal Revenue Service (IRS) issued Notice 2005-1, 2005-2 IRB 274, clarifying certain aspects of the statute, and additional guidance is expected throughout 2005. Although the new statute does not specifically target offshore hedge fund management and incentive fee deferral arrangements, the broad scope of the statute appears to render it applicable to many such arrangements, and the onerous consequences of non-compliance make it critical for hedge fund managers to examine their deferral arrangements to assess whether changes should be made to conform with the new law.
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Format: PDF | Size: 33KB | Date: Feb 2005 | Pages: 3
