Vanguard may pass on reserve tax cut
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Vanguard could cut the 0.5 per cent up-front fee on its passive UK equity and UK equity income funds in line with Budget plans to review stamp duty reserve tax.
The Government revealed it will be reviewing the schedule 19 SDRT and may scrap or amend the tax. The tax, which only affects UK funds, is paid in addition to SDRT paid on fund acquisitions of UK equities. It is paid by UK funds investing in other funds, even if those other funds are not invested in UK equities.
Head of retail sales Nick Blake says: “Anything that reduces and lowers costs for investors is a benefit. Most fund managers would tell you that schedule 19 requires a fortnightly calculation and return, which comes at a cost.”
Vanguard is interested in the master feeder fund structures set to be introduced with Ucits IV, which would allow funds in different domiciles to feed into the same fund. Blake says: “Ucits IV brings advantages in terms of efficiently running funds and is something we are keen to explore.”
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