Non tax resident creating a QIAIF

Clueless Clive

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Hi All. I was reading up on KPMG's report which for some reason AAM wont let me link as it's classed as SPAM but

Highlights:
Setting up a QIAIF in Ireland is relatively straightforward, and the Central Bank has committed to a 24-hour approval process.

With virtually unlimited flexibility in its investment strategy and the support of a robust Irish regulatory framework, QIAIFs are a suitable structure for a range of funds including: Property funds, Private equity funds, Hedge funds, Venture capital funds, Fund of funds, Emerging market funds, Infrastructure funds, Loan funds.

No limit on subscriptions other than a minimum initial investment of €100,000

Irish resident companies are subject to tax on their worldwide income at a rate of 12.5 percent for trading income and gains, 25 percent for passive income, and 33 percent for capital gains. In this regard, the profits earned by an AIFM in respect of services provided to a QIAIF should be taxable at the 12.5 percent trading rate of tax.

While an exit tax of 41 percent applies to distributions or redemption payments made to Irish resident investors, there are exemptions for various categories of Irish investors

There is a full exemption from stamp duties on the issue and transfer of units or shares in an Irish QIAIF

Irish QIAIFs are exempt from Irish tax on their income and gains, irrespective of where their investors are resident


I'm not a very intelligent man, so i'm hoping that someone can help parse this information.

Am I to read that, provided you have an investment of a minimum of 100k, you can set up a QIAIF as a non tax resident, create a property fund starting with say, 2 houses, get taxed on the income from that at 12.5%, pay no tax on distributions while you are foreign resident, let the money accumulate within the fund, continuing to purchase properties and then when your day is up, transfer shares of the QIAIF to your kids for a tax free method of wealth transfer?

Is there a flaw in that plan somewhere?
 
Is there a flaw in that plan somewhere
A few.

For starters, you'd want to be talking about a lot more than 2 houses, just to pay for the cost of compliance. These are regulated structures, with monthly reporting requirements to CBI.

Re wealth transfer - transferring ownership of units in an entity is still taxed under inheritance tax.

It's taxable to get the money into your own hands. There's just no withholding tax in Ireland.

You can probably achieve some of the benefits you think are possible just by using a pension structure.