Tax Position for US Investors
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Cur8 Capital’s private market investment products provide US investors with tax-optimised international diversification. An independent tax adviser has confirmed most products qualify for non-PFIC status, eliminating punitive tax treatment while delivering reduced volatility and premium returns through carefully structured opportunities.
Whilst we do not actively market in the U.S., accredited U.S. based investors who onboard with Cur8 Capital are welcome to invest with us.
As a result, we support a growing number of U.S. based clients seeking to diversify their portfolios beyond domestic markets. This trend is driven by several factors:
Understanding the tax implications of cross-border investments is a critical concern for our U.S. clients. To address questions around reporting requirements and tax classifications that could impact their returns, we’ve obtained independent confirmation from U.S. tax specialists regarding the tax treatment of our products, ensuring transparency and clarity for our American Investors.
For US investors, overseas investments present unique tax considerations that can significantly impact returns. The primary concern revolves around the Passive Foreign Investment Company (PFIC) classification and related regulations.
Under the US tax code, a foreign corporation qualifies as a PFIC if:
Investments classified as PFICs face potentially punitive tax treatment, including:
These regulations were designed to prevent US investors from deferring tax obligations by holding passive investments in offshore entities, but they create significant complications for legitimate international diversification.
US investors in foreign public equities and funds typically encounter PFIC challenges, as most foreign mutual funds and ETFs fall under this classification. However, private market investments often have structural advantages that can help avoid PFIC status, particularly when:
To provide clarity for our US investors, we recently sought expert guidance from US tax specialists at Mazars regarding the classification of our investment offerings. Based on this professional assessment, we can provide the following definitive information:
| Cur8 Capital Investment Product | PFIC Status |
|---|---|
| GBP Income Fund | Non-PFIC |
| Pharmacy Income Fund | Non-PFIC |
| Private Equity: Pharmacy of the Future | Non-PFIC |
| USD Income Fund | Non-PFIC |
| Venture Capital Fund | Non-PFIC |
| Primary Healthcare Real Estate Strategy (PHRE)* | PFIC |
| Rasmala UK Property Fund | PFIC |
For all investment products, Cur8 Capital can assist investors by providing:
Beyond tax considerations, private markets offer structural advantages for US investors seeking international exposure:
Reduced Volatility
Private assets are typically valued quarterly rather than continuously, which can smooth reported returns and reduce the impact of short-term market fluctuations, especially during periods of uncertainty.
Lower Correlation
Many private investments demonstrate reduced correlation with US public markets, particularly during periods of market stress, potentially improving overall portfolio resilience.
Longer Time Horizons
Private investments often require longer commitments, sometime of 5+ years, which can help investors maintain discipline through market cycles rather than reacting to short-term volatility.
Illiquidity Premium
The reduced liquidity of private investments often commands higher returns, potentially enhancing long-term portfolio performance. This constraint can actually benefit investors by:
The UK market currently offers compelling opportunities:
Cur8 Capital provides a suite of investment vehicles designed to provide exposure to UK private markets, whilst optimising for U.S. tax treatment:
Fixed Income Alternatives
Tailored strategies, including direct lending, mezzanine financing, and specialised credit. Our fixed income funds often feature:
Performance here is more closely tied to borrower creditworthiness than to public market sentiment, with good levels of security protection in the event of default.
These products are structured to generate primarily non-passive business income.
Private Equity
The strategy involves acquiring significant or controlling stakes in private companies to drive operational improvements and eventual value realisation. Key characteristics include:
The extended timeframe of private equity investments means they can ride out short-term volatility focusing on core business fundamentals.
The active management approach typically results in non-PFIC classification.
Venture Capital
Investing in early-stage, high-growth companies offering:
Many startups develop and grow independently of macroeconomic factors, focusing instead on product development and market penetration.
Real Estate
Tangible asset exposure via direct ownership or specialised funds, with exposure to:
Real estate valuations typically move on fundamentals like location, rental yield, and asset improvements, rather than reacting to political headlines.
Whilst our Real Estate strategy (PHRE) maintains PFIC status due to its income profile, we provide complete reporting support for QEF elections to mitigate adverse tax consequences.
At Cur8 Capital, we understand the unique challenges facing US investors seeking international diversification. Through careful structuring and comprehensive reporting, we’ve created investment vehicles that provide access to attractive UK private market opportunities while addressing US tax considerations.
For specific tax advice regarding your individual situation, we recommend consulting with your tax professional. Cur8 Capital is committed to providing all necessary documentation to support efficient tax filings.
For more information about our investment offerings and their specific structures, please contact our investor relations team through the chat head on our website and mobile app.
Disclaimer: While we have sought professional guidance on these matters, Cur8 Capital is not a tax advisor. The information provided is for general informational purposes and should not be construed as tax advice. Please consult with qualified tax professionals regarding your specific circumstances. No reliance may be placed on the information above.
