Regulatory reforms must include the removal of discrimination against closed-ended funds when it comes to investing in bonds, the Association of Investment Trust Companies says.
The call has been stepped up after support from asset managers active in both the open and closed-ended sectors, the AITC says. Currently, just 2% of the estimated £60bn in investment trusts is invested in bonds because such funds must pay a 30% tax on any income against 20% levied on Oeics. Additionally, open ended funds that hold more than 60% of their money in bonds are classified as bond funds, meaning they can pay out income as interest rather than dividends, thus avoiding corporation tax. The AITC quotes Michael Wrobel, head of investment trusts at F&C Asset Management and James...
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