John Laing Infrastructure propose moving domicile to UK

John Laing Infrastructure propose moving domicile to UK – The NAV of John Laing Infrastructure [JLIF] rose by 9.5% the company informed shareholders in its final report for the year ending 31 December 2018. The share price, however, fell by 4.8%. The value of the portfolio value rose by  13.3% to £1,379.3 million, with the underlying portfolio growing by 9.11%

Commenting in the report, the chairman explained that “the decrease in share price towards the end of the year was largely as a result of comments made at the time by the UK Labour Party at its Annual Conference regarding its attitude towards the PFI procurement method.” Everything that related to infrastructure reacted in the same way.  In addition, concerns amongst investors that interest rates are rising or will rise globally has put pressure on infrastructure.

Proposal to be put to shareholders in May to move tax domicile to the UK and become UK Investment Trust.

The board of JLIF believes that that it would be in the best interests of the Company and its shareholders to become a UK Investment Trust. JLIF is currently a Guernsey registered closed-end investment company.

A proposal will be put to shareholders in May to amend the Articles of Incorporation such that Board and Annual General meetings can be held in the UK, with the aim, subject to regulatory approval, of implementing the tax residency change to the UK on 1 January 2019 so that the Company may be treated as a UK investment trust from that date.

This is something that the board has been considering for a while and has been raised in previous reports. It is to mitigate the impact of both treaty changes and changes to future tax provisions and follows careful analysis  of the implementation on the company of tax changes recommended by the OECD’s Base Erosion and Profit Shifting (BEPS) initiative, which was initiated by the G20 in 2012.

BEPS refers to tax planning strategies used by multinational companies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity. While these corporate tax planning strategies may be technically legal and rely on carefully planned interactions of a variety of tax rules and principles, the overall effect of this type of tax planning is to erode the corporate tax base of many countries in a manner that is not intended by domestic policy.

Therefore, this move clarifies JLIF’s position, enhanced further by the UK investment trust structure. In recent times, UK investment trust  regulations have been changed to allow investments of the king that JLIF undertake; something that was previously not the case.

JLIF : John Laing Infrastructure propose moving domicile to UK

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