The Investment Management Association (IMA) has welcomed numerous changes affecting offshore funds which will enhance the UK's competitiveness as a domicile for authorised investment vehicles.
In his Budget, Alistair Darling announced a reformed Offshore Funds Regime, which will come into effect from 1 December 2009.
The new regime is designed to provide a simple and fair approach to the taxation of UK investors in offshore funds, says the IMA.
Legislative changes will be made to clarify transactions by UK authorised investment funds and equivalent offshore funds will be taxed as investing, not trading.
Furthermore, an extension of the dividend tax credit to investors in offshore funds, which comes into effect immediately, will ensure there is equal treatment between onshore and offshore equity and bond funds, says the IMA.
The Budget also announced the launch of a Tax Elected Funds regime, intended to allow UK authorised investment funds to be marketed competitively to UK investors and worldwide.
"IMA has long been campaigning on issues impacting the competitiveness of the UK funds industry and the need for fair, non-discriminatory treatment of offshore investments," says Julie Patterson, director of taxation and authorised funds at IMA.
"These announcements are a reflection of our constructive dialogue with the authorities, which has allowed us to develop a programme of measures to enhance the competitiveness of the UK funds industry."
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