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A taste of the exotic

Disappointing weather is not the only thing currently making people think about fleeing the UK’s shores.

In the space of a week, asset manager Henderson, engineer Charter and office service specialist Regus all announced they would be shifting their tax residence overseas because of the complexities of the UK regime.

Charter announced during its interim results last week that it would be transferring the company’s head office and tax residence to Dublin. Regus operates in over 71 countries and said its planned move to Luxembourg would help reduce the overall tax burden on the company. Since then, Brit Insurance has also been reported to be mulling over a move to Bermuda, following the lead of a number of other insurance companies who have left UK soil to escape tax on profits.

Fidelity claims keeping tax from the tax man will be easier for retail investors with this week’s launch of FidelityFundsnetwork’s new tax wrapper analyser.

Research carried out by Fidelity, and revealed in this week’s Money Marketing, revealed dramatic differences on returns from popular funds over a five-year period depending on the choice of wrapper.

£50,000 invested in a JP Morgan natural resources fund would give a higher tax rate payer £247,000 if they were to cash in today but only £193,000 if they had held the investment in a offshore bond and £183,500 in an onshore bond. Fidelity FundsNetwork head of trusts ad tax planning solutions Paul Kennedy says: “The difference is simply tax being paid where it need not.”

In other news, US investment bank and asset manager Baird recently unveiled plans to boost expansion in Asia. The company’s operations cover capital markets, private equity and asset management with an investment banking business that specialises in mid-market deals across Europe and the U.S. The recent launch of investment banking operations in Shanghai is intended to exploit the mid-market deal space in Asia.

New Star announced that it will be tightening its belt after taking a hammering from the credit crunch. Last week New Star posted a 44 per cent drop in operating profits for the first half of 2008. The fund manager’s chairman John Duffield says advertising revenue would be halved as it attempted to pull itself back from “the toughest stock market conditions for more than five years”.

Recent speculation over cost cutting at New-York based hedge fund Atticus reported by Money Marketing has been denied by the company. No top executive bonus package cuts are planned according to a company spokesperson.

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