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AIC backs govt proposals on investment trusts

The Association of Investment Companies has endorsed HM Treasury proposals to allow investment trust companies to invest tax-efficiently in bonds and other interest producing assets.

AIC director general Daniel Godfrey says: “The changes we are supporting will re-establish bonds as an attractive asset class for investment trust companies.
They will allow investment in company bonds, gilts and other assets without adverse tax consequences where the boards wants this exposure to deliver returns for shareholders. Reform will create new opportunities for investment trusts to meet changing consumer needs.”

Godfrey says the proposals could encourage new types of investment trusts to be launched such as dedicated bond vehicles or balanced funds which will provide shareholders with a mix of bond and equity exposure.

He says: “The formal consultation on these measures has a few weeks to run but we have published our views early to encourage other stakeholders to lend their support to the changes. It is clear that the Government is facing many competing priorities and we are keen that these measures are not overlooked when the next Finance Bill is being drawn up.”

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