Putting its pitch in ahead of the Pre-Budget Report, the Association of Investment Trust Companies is urging changes to rules it says discriminate against investment trust bond income to the advantage of unit trust products.
These discriminatory rules include differences in tax rates and ‘status’ affecting payouts of income to investors, and help explain why just 2% of investment trusts’ £58bn of funds under management are in bonds. For example, whereas investment trust funds pay a corporate tax rate of 30% on income from bonds, unit trusts and Oeics pay just 20%, meaning investment trusts must outperform by 10% just to keep up. And whereas a unit trust investing 60% or more in bonds gains a bond fund status enabling it to pay out income as tax deductable interest rather than a dividend, an investment tru...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes