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BUDGET 2009 NEWS: AIC welcomes tax call on inv trusts

The Association of Investment Companies has welcomed the new tax framework for investment trusts.

AIC director general Daniel Godfrey says the move to enable tax efficient investment in interest bearing assets could see an increase could see a swell in bond offerings.

He says: “This will open up new opportunities at a time when increasing numbers of consumers are considering bonds as an investment option.  It will support the UK as an international financial centre and should be warmly welcomed. 

“Securing this change has been a long-standing ambition of the AIC and we are delighted that today’s announcement brings certainty to the outcome and the introduction of a new regime another step closer.”

RCM Head of Investment Trusts Simon White: ”Its good that the new tax framework creates a level playing field for Investment Trusts and broadens the scope for investment in bonds for existing trusts without a tax penalty.

“Closed end funds are particularly well suited to less liquid sectors of the bond market, and in our view current credit spreads in a number of areas look attractive. US closed end funds investing in fixed interest securities have seen major growth this decade and we see scope for this sector developing further in the UK over the medium term.”

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