Fund managers are holding discussions with the Treasury to get favourable tax treatments if they move billions of pounds of cash from Europe to the UK after Brexit.
It is understood a group of asset managers is asking the government about repatriating UK investors’ money if the EU changes the regulation of the UK investment industry, the FT reports.
Around $1trn is managed by UK-based fund managers for funds based in Ireland or Luxembourg.
An industry person familiar with the discussions tells the FT: “[We have been] talking to UK Treasury about bringing that money back . . . it would be relatively easy for the UK to say that [asset managers] who wants to move cash, here’s this expedited model.
“You could take Dublin and Luxembourg’s lunch. The UK can offer an easy way to switch back with no tax consequences. [The government] could use it in as a threat in negotiations. The Treasury recognises there is an opportunity.”
The Treasury is understood to consider such a move to be premature since there are no current plans to change the rules governing asset management.
The talks with fund groups have been prompted from fears that after Brexit they might lose or face restriction on the “delegation” of funds, which allows funds to be set up and regulated in one country such as Luxembourg while managed and sold in another, like London.
A Treasury spokesman says: “The UK is a world leader in asset management and the industry plays a pivotal role in the UK economy.
“The government meets regularly with the asset management industry to understand the challenges it faces, as well as potential opportunities, and has done so long before the EU referendum.”