Group Tax Strategy

At the core of Generation’s business lie our ten Core Values. We use these to underpin our approach to our business operations and in developing this Tax Strategy, we have looked at the Values that are most relevant to taxation. At the heart of our business is a commitment to Sustainable Capitalism. We believe that the appropriate payment of taxation is a key requirement for all businesses and these payments enable wider society to benefit from business success.

The Generation Group is dedicated to being a collection of responsible taxpayers: managing our tax affairs in a straightforward manner; seeking to have tax affairs that are easy to explain; and complying with local tax laws and regulations and with OECD guidance.

Our tax strategy, applicable to the Generation partnerships and corporate group, managed funds and also our relationship with clients, seeks to achieve the following:

  • Adherence to local and international laws and regulations and with OECD guidance and to keep up to date with changes in legislation;
  • Correct and timely payments of all taxes due globally including taxes on the partnership profits, employer taxes, employee withholding taxes, indirect taxes and other local taxes and charges;
  • A group control framework that identifies tax risks and responds appropriately to identified risks;
  • Provision of training and support to the business on tax matters as required;
  • To maintain an open, positive and cooperative working relationship with HMRC and overseas tax authorities

Governance and management of tax risk

Generation currently has under 100 partners and employees across its global operations. Given this background, we look to manage tax risk in a similar way to any other area of operational risk across the Group. Our Finance and Tax Team will generally take the lead in identifying, managing and monitoring tax risks within the business. Monitoring of key tax risks and issues is performed on an ongoing basis. If material issues arise, these are escalated to the Operating Committee and, in turn, if necessary to the Generation Management Committee, as supported by the Risk Oversight Group. This Group Tax Strategy is approved annually by the Generation Management Committee.

As a partnership organisation with multinational business operations, the Group and its partners are exposed to a number of potential tax risks grouped into three areas: Tax compliance and reporting risks, which cover risks associated with compliance failures; Transactional risks, which arise where steps are taken without appropriate consideration of the potential tax consequences; and Reputational risk of the wider impact tax risk may have on our business relationships. 

We seek to manage these three areas of risk through the maintenance of a series of Controls residing across our business. The Group Risk function provides oversight as to the adequacy of the operation of these controls.

Tax planning

Generation has several international operating locations but the majority of the group’s operations and profits are based in the UK and US. The Partnership aims to keep tax affairs simple and focuses primarily on business outcomes with tax considerations a subordinate factor in decision making. While the Partners seek to structure their operations in an efficient manner having regard to prevailing taxation regimes, tax minimisation is not a key factor as we consider proper accounting for the tax payable on the Group’s profits as one of our key responsibilities.

It should be emphasised that because the Group operates through entities seen as tax transparent, little tax on the Group’s profits is due or payable by Group. Instead, the partners of Generation (all individuals based in major developed economies) are responsible for the declaration of Generation profits and payment of tax thereon. We consider that the tax principles laid out in this document should also cover the tax filings of Generation partners in respect of their returns from the business.

We aim to ensure our structures support business and management flexibility whilst understanding the potential tax costs. While we do not enter into transactions with the sole intention of reducing our tax costs, we do endeavour to identify the tax consequences of business changes, remuneration strategy or new initiatives in advance and to understand any business opportunities for mitigation, particularly where potential tax costs may act as a barrier to business activities for our funds or clients.

We will utilise tax incentives or opportunities for obtaining tax efficiencies which:

  • Do not carry significant reputational risk or significant risk of damaging our relationship with the fiscal authorities in the key jurisdictions in which we operate;
  • Are aligned with Generation’s Core Values;
  • Are aligned with the intended policy objectives of the government that introduced the incentives; and
  • Are aligned with business or operational objectives.

Specifically, we may structure investment funds that are not themselves subject to taxation where it is our reasonable expectation that the underlying investors in such funds will be subject to taxation.  The broad principle here is that pooled investment is generally seen to be efficient and brings with it the advantages of reduced cost and diversification relative to direct investment.  We do not believe it contrary to be contrary to our Values or Tax Strategy to take into consideration what a client’s tax exposure would likely have been had it made an investment directly rather than via a fund.  We fully support the efforts of the international community to ensure appropriate reporting of income and gains arising from such funds and, therefore, we adhere to all applicable international reporting standards including the OECD’s Common Reporting Standard “CRS” and the United States Foreign Account Tax Compliance Act “FATCA”. 

External advice may be sought in relation to tax planning or areas of complexity or uncertainty to support the Group in complying with its tax strategy.

Tax compliance and relationship with HMRC and overseas tax authorities

We seek to comply with all tax filings, reporting and tax payment obligations in all jurisdictions, paying what is due at the right time. Given the complexity of the industry in which we operate, it is occasionally possible that our views, as supported by our advisers, on appropriate tax treatment may differ from that of the authorities. If such circumstances arise, we will work constructively with the tax authority involved with the aim of achieving a swift resolution.

We do not tolerate tax evasion, nor do we tolerate the facilitation of tax evasion by any person(s) acting on the Group's behalf. We have appropriate procedures in place to support our policy towards the prevention of the facilitation of tax evasion.

Generation regards the publication of this tax strategy as complying with the duty under paragraph 16(2) of Schedule 19 of the Finance Act 2016 to publish the group tax strategy in the current financial year.