Three consultation papers focusing on how to enhance the competitiveness of the UK's asset management industry have been announced by the economic secretary to the Treasury, Kitty Ussher MP.
The consultations follow a bundle of measures announced in this year’s Budget, designed to make the UK a more competitive location for asset management and to advance the Government’s City competitiveness agenda.
The consultation process will propose the introduction of a direct tax exemption regime for UK Authorised Investment Funds and removal of the tax as a barrier to Qualified Investor Schemes by replacing the substantial holding rule.
It will also advise adaptation of the tax rules for Investment Trust Companies to deliver tax efficient investment into bearing assets.
“The Government is determined to ensure that the UK remains a competitive place to do business. The consultation papers are a step forward in improving the taxation environment for the asset management industry,” says Ussher.
IMA welcomed HMT’s consultation papers as the basis for a significant step forward to close the gap between UK authorised investment funds and offshore funds.
HMT’s consultation on an elective tax regime for authorised funds would enable investors to pay the correct amount of tax on distributions, says the IMA.
Exempt investors such as pension funds, charities, SIPP and ISA investors would no longer be subject to tax at the fund level that they cannot recover, while individual UK taxpayers would not be affected by the changes.
Julie Patterson, director of authorised funds and taxation at the IMA, says: "In particular, these proposals coupled with replacement of the QIS 10% rule should make it more attractive to establish authorised funds for institutional investors in the UK.”IFAonline
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