The IMA has outlined a number of measures to enhance savings and UK competitiveness in its pre-Budget representations to the Government.
The trade body is urging the Government to regularly increase the limits for ISAs and CTFs at least in line with inflation. Linked to this, and coupled with the need to encourage not penalise personal saving, the IMA has also called on the Government to consider abolishing stamp duty. It argues this tax erodes the value of individuals' retirement and other savings, including in flagship Government schemes such as CTFs, ISAs, stakeholder pensions and the proposed new Personal Accounts.
The IMA has also expressed its concern on the competitiveness of the UK funds industry. This follows research undertaken as part of its Fifth Annual Industry Survey of the UK asset management industry which showed the UK was losing a significant amount of business to offshore funds.
It says action must be taken now or the opportunity for the UK to become a significant fund centre will be diminished as business will be lost to Dublin and Luxembourg, with the consequent loss of revenue to the Exchequer.
While progress is being made on Property Authorised Investment Funds, the IMA believes more can be done on a wide range of issues such as repeal of Stamp Duty Reserve Tax for funds and introducing certainty that the use of derivatives by Authorised Investment Funds will not be regarded as trading activity with a consequential tax charge.
The previous economic secretary announced on 14 December 2006 the Treasury would engage with IMA on these issues and a series of discussions has already taken place.
The IMA has also called for amendments to measures affecting the efficient operation of authorised investment funds and the Offshore Funds regime.
Richard Saunders, Chief Executive of the IMA, commented: "It is crucial that the UK tax regime keeps up with changes to markets and investment practices so as not to disadvantage the industry or hinder the development of the UK as a global centre for asset management. We have had a refreshingly open dialogue with the Treasury and HMRC on these matters and hope to see further progress in the PBR.
“On stamp duty, the charge undermines Government policy by eroding the value of tax-incentivised saving, and eventual abolition needs to become an objective."
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