Seen from Singapore or Hong Kong, recent European headlines make uneasy reading: volatile bond markets, uncertainty across the region, and a new UK Prime Minister. Real estate, private credit, and hedge fund managers are asking a fair question: is the UK still a dependable place to invest?
A Budget Built on Stability, Not Surprises
Chancellor John Healey’s first Budget, delivered on 28 October 2026, put fiscal discipline first. The government’s fiscal rules will be met, with the Office for Budget Responsibility forecasting headroom of £15bn in 2029–30 and £20bn in 2030–31. Calls to align capital gains tax with income tax rates were rejected, and tax on dividend income will not rise further.
The backdrop is high public debt, with debt interest now one of the largest items of UK government spending. The UK Budget therefore had two linked aims: sustainable public finances and growth. The approach is to keep gilt markets confident through credible fiscal rules and to support growth through targeted investment and deregulation rather than broad tax rises.
For managers, the practical point is simple: a government focused on market confidence and growth has little reason to spring sudden or punitive measures on the investment industry.
For investors and entrepreneurs, the main measures were: a new “founder’s relief” charging capital gains tax at 10% on up to £10m of lifetime gains; an additional £20.4bn for the National Wealth Fund and the British Business Bank; a commitment to work with pension funds and asset managers to mobilise private investment; and the removal of some £800m of regulatory and tariff burdens on business. Revenue-raising was targeted, most notably a time-limited increase in the bank surcharge. Fund managers were not singled out, though the higher tax on carried interest introduced under the previous Chancellor stays in place (see below).
Why the UK Is Different
The UK’s appeal has never depended on a single Budget. It rests on English law, widely used in fund and finance documentation worldwide; an independent, commercially experienced judiciary; a sophisticated regulator; and a legislative process that consults before it acts. Tax and regulatory changes are usually published in draft and debated before they become law. For a fund with a seven- to ten-year life, that predictability is worth more than any headline rate.
A Modernised UK Funds Toolkit
The UK is now competing for funds, not just managers. The Reserved Investor Fund (RIF), available since March 2025, is an unauthorised co-ownership contractual scheme. It requires no FCA product authorisation, although it must have a UK alternative investment fund manager and, currently, a UK depositary. Often compared with the Luxembourg RAIF FCP, it is open only to professional and large investors. Investors benefit from statutory limited liability, sub-funds of an umbrella RIF are ring-fenced, and the RIF is broadly opaque for capital gains purposes, with stamp tax treatment mirroring that of the co-ownership ACS. The RIF is particularly well suited to UK commercial real estate and to pension investors, including Local Government Pension Scheme pools, alongside other widely held investors.
The offshore funds rules have also been simplified. The Finance (No. 2) Bill 2026 streamlines the treatment of non-reporting offshore funds held through offshore structures, with effect from 6 April 2025, and ensures that offshore income gains can be designated under the temporary repatriation facility introduced alongside the new residence-based regime for internationally mobile individuals. Taken with the RIF, these changes show that the UK wants to host fund vehicles, not just fund management teams.
The Asian Opportunity: Think Hybrid, Not Either/or
Asia’s financial centres are competing hard for talent, and the tax treatment of carried interest and performance fees is now a key battleground. Here the UK Budget offered nothing new. Since 6 April 2026, qualifying carried interest has been taxed within the income tax framework at an effective rate of around 34%, following increases introduced under the previous Chancellor; non-qualifying performance fees can be taxed at up to 45%.
Hong Kong already offers a 0% rate on eligible private equity carried interest. A Bill gazetted on 12 June 2026 would extend that 0% rate to carried interest and performance fees across hedge funds, private credit, real estate and other strategies, remove the hurdle rate and HKMA certification requirements, and apply retrospectively from 1 April 2025. The Bill is still before the Legislative Council, and proprietary trading firms have been confirmed as outside its scope. Singapore’s MAS announced on 19 August 2026 a tax exemption for managers’ profit share from qualifying funds, effective from Year of Assessment 2027, with the detailed mechanics expected in Singapore’s Budget 2027.
For UK and international managers, the answer may not be to pick one location, but to rethink how a multi-office platform is built. A hybrid UK–Asia model could combine London’s fund structuring, investor base and legal infrastructure with investment teams based in Hong Kong or Singapore. Both Asian regimes require real substance – local staff, local spending and decisions taken locally – and the platform must be designed so that profits and individuals are not pulled back into UK tax by the way it operates.
This is where the legal structure does the heavy lifting. Key workstreams include manager licensing in Hong Kong and Singapore, employment and secondment arrangements, carried interest and profit-sharing documentation, intra-group investment management and advisory agreements, and governance and decision-making protocols that stand up to scrutiny in every jurisdiction involved.
How Broadfield Can Help
Broadfield’s global practice advises across London, Hong Kong, and the wider region on fund formation, manager establishment and cross-border platform design. Whether you are considering a RIF for UK real estate, setting up or expanding an office in Hong Kong or Singapore, or restructuring an existing multi-office business, we work with your tax advisers to build a structure that works on both sides.
This article is for general information only and does not constitute legal or tax advice. Hong Kong’s Bill remains subject to enactment and Singapore’s regime remains subject to detailed rules. UK Budget measures are as announced on 28 October 2026 and remain subject to legislation.
