Reporting funds tax regime opens door for accumulating ETFs

The reporting regime, which came into effect on December 1, 2009, means all ETFs regardless of whether they distribute or accumulate income could gain reporting status. This allows UK investors to incur an 18% or 28% capital gains tax rate rather than an income tax rate of up to 50%, according to PricewaterhouseCoopers UK asset management tax partner Teresa Owusu-Adjei. She says under the UK rules prior to the regime change in December, accumulating funds could not qualify for distributor status, which meant gains in the value of the fund were taxed as offshore income gains at 50%. ...