Revamped regulations affecting UK authorised investment funds will allow the UK to compete for business more effectively against offshore jurisdictions, according to the IMA.
The trade body says the changes, which introduce the Tax Elected Funds Regime, provide certainty funds will be taxed as investing, not trading.
The new regulations accompany former alterations to the UK fund tax regime enabling UK funds to:
- Undertake a wide range of investment transactions with certainty of tax treatment;
- Market competitively to UK and international investors;
- Sell to sophisticated investors without being impeded by complex tax rules; and
- Invest tax efficiently in property.
Recent changes to the law to allow the title of units and shares in funds to be transferred electronically further enhance the package of reforms by enabling the industry to develop more efficient settlement processes, says the IMA.
It believes work on a "protected cell" regime for open-ended investment companies will protect investors in different sub-funds of an Oeic from the low risk of cross liability, as well as enhance the competitiveness of UK funds.
"This package of reforms, coupled with the UK's fund regulatory regime, makes the UK a serious contender as a fund domicile, for UK and overseas investors," says Julie Patterson, director of authorised funds and tax at IMA.
"For UK investors in particular, authorised funds can now offer a tax-efficient vehicle for exempt investors, such as pension funds, charities and Child Trust Fund, ISA and SIPP investors," she adds.
The HM Treasury publication 'Enhancing the competitiveness of UK funds' can be found at: http://www.hm-treasury.gov.uk/consult_enhancing_ukfunds.htm
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