The Inland Revenue has removed two major barriers to UK investment funds being sold overseas. The me...
The Inland Revenue has removed two major barriers to UK investment funds being sold overseas. The measures, applied retrospectively from 16 October 2002, are designed to make it more attractive for foreign investors to buy UK products.
Effective from that date, the Revenue has made it easier for foreign investors to receive interest distributions from authorised unit trusts and Oeics gross of income tax, as long as they invest through a reputable intermediary.
Under previous regulations, overseas investors were able to receive interest from UK investment funds gross of tax if they completed a not ordinarily resident (NOR) declaration, but as funds are typically sold through intermediaries, it often proved difficult to obtain this. The rule changes mean the NOR declaration is no longer necessary where the interest is paid to an intermediary on behalf of their client.
Foreign investors are also no longer liable to a potential inheritance tax charge on holdings in UK investment funds, applied retrospectively to 16 October 2002, although in practice very few have assets above the tax-free IHT threshold.
Communications director at Threadneedle Richard Eats said these measures would remove the major issues with selling funds to overseas markets and should allow the UK fund management industry to take better advantage of this country's advantageous domicile status when exporting products.
To promote 'long-term investment'
Switching 'hard and expensive'
Smaller funds still packing a punch
To drive progress