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The Henderson Diversified Income Trust has disclosed that it is considering relocating its Luxembourg subsidiary to the United Kingdom, citing increasing tax risks in the Grand Duchy.
In a statement published by the London Stock Exchange on October 7, Henderson said that a number of recent developments in Luxembourg tax legislation and practice has increased the legal risks of operating in the jurisdiction, particularly with regards to transfer pricing.
"The board and its advisers have continued to review these developments and have recently concluded that the company's existing structure may involve increased complexity and risk," Henderson said.
"Accordingly, the board is exploring the possibility of simplifying its tax structure by electing to join the UK investment trust company tax regime, including changing its place of incorporation to the United Kingdom," the firm added.
Such a move is likely to result in the liquidation of its Luxembourg subsidiary and the formation of a new company in the UK, which is expected to reduce its annual running costs.
The company stated that its investment management arrangements would be unaffected by this reorganization. However, it confirmed that it would only proceed if it is in the best interests of shareholders.
Henderson expects to update shareholders on the matter later this year.
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