life & banking
Scottish Equitable is continuing discussions with Northern Trust in an attempt to overcome the tax difficulties in linking the offshore manager of managers' offering to its UK life product range.
The group has links to two Dublin-based Oeics run by Northern trust, which are available via its pension and offshore life links.
The problem for onshore life products is the UK dividend stream from the portfolios is treated as an overseas income stream, creating an additional 20% tax charge.
Mark Pearson, head of investment marketing and fund development at Scottish Equitable, said a solution has not yet been found, but the groups are talking about the possibility of Northern Trust domiciling the UK part of its funds onshore. Another possible solution would be to launch onshore Oeics that mirror the Dublin funds, added Pearson. He considers a change to the tax regime to be unlikely.
The two Northern Trust funds, Stockmarket and Balanced, typically have at least 50% invested in UK equities. Pearson believes, therefore, the tax drag on performance if they were offered via Scottish Equitable's onshore bonds would be too great. 'That sort of drag would not benefit our clients,' he said
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