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Tax reclamation is an important issue for professional money managers for two primary reasons:
First, excess withholdings that are recovered directly enhance the performance of the portfolio. On average, an international portfolio can realize a gain of 50 basis points or more per annum from engaging in tax reclamation. However, managers recovering funds for the first time are often entitled to multiple years of retroactive recoveries, due to statutes of limitation. Therefore, the initial recovery can be a windfall for the fund.
Second, managers must ensure that they are fulfilling their fiduciary responsibility and making sure that clients are receiving their full entitlements in today’s regulatory environment. GlobeTax can help fulfill this requirement by determining any entitlements due to your clients and completing the process of fund recovery.
Generally, mutual funds can claim at the fund level rather than at the unit
holder level of each member within the fund. Many mutual fund managers assume that the fund’s custodian is performing tax reclamation services on their behalf. Unfortunately, this is frequently not the case.
This places responsibility with the fund manager for ensuring that they are recovering all monies they are entitled to. As independent experts, GlobeTax can evaluate the custodian’s reclaim services, so mutual fund managers can ascertain whether they are receiving all excess withholdings to which the fund is entitled.
GlobeTax has relationships with numerous custodians and brokers whose clients we service on a case-by-case basis. Managers who believe there is a possibility of tax reclamation for particular accounts refer their clients (and their client’s advisers) to GlobeTax. We contract with the client directly, performing reclaim services on their behalf and crediting recovered funds directly to their accounts.
For more information on how GlobeTax can assist money managers in obtaining the maximum benefit for their clients, please contact us.
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