Aberdeen Asian Income trust eyes switch from Jersey to UK tax residency

The £492.2m Aberdeen Asian Income trust is looking to migrate its tax residence to the UK from Jersey to avail of lower rates, after it had total expenses of £1.5m for the first six months of the year.

In a stock exchange announcement the board said it had been advised it can "access lower rates of withholding tax" as a UK tax resident because of "a greater number of double tax treaty agreements between the UK and overseas jurisdictions".

The trust is currently a Jersey tax resident and will remain a Jersey incorporated entity even if its tax residency changes.

The change of tax residence would "increase the revenue of the company available for distribution to shareholders and there should be no material disruption to the company's operations," according to the board.

The decision is subject to shareholder approval as well as tax and regulatory approvals.

The cost of overseas taxation of the trust until the end of June was just over £1m, according to its half year report.  

Elsewhere, the chair of the board, Charles Clarke, announced his intention to retire with Ian Cadby, a current director to assume the role from 1 January 2022.

The trust will also be changing its name to abrdn Asian Income Fund from the start of the year to align to the new branding of the asset manager.

The discount on the trust widened in the six months to the end of June to 10.7% from 6.9% at the end of December, according to its half year reports.

The company's net asset value return for the first half of the year was 6.9%, versus the MSCI AC Asia Pacific ex Japan High Dividend Yield index's return of 7.5% and the MSCI AC Asia Pacific ex Japan index's return of 5.8%,.

Its share price did not keep pace, increasing just 2.7% in the period.

First published by our sister title Investment Week