Newsletters

Tax treatment of side pockets

Investment funds holding assets affected by sanctions due to the Ukraine war need to solve problems caused by their lack of liquidity. One solution is to separate the illiquid assets into so-called side pockets. With regard to the tax consequences of the creation of side pockets, the German Federal Ministry of Finance (BMF) has published its draft for equitable tax relief regulation. In our view, the BMF does not go far enough.

Note: This newsletter is only available in German language.