UK asset managers will benefit from savings of at least £145m a year after the Government moved to abolish Schedule 19 stamp duty in “the first step” to boosting the industry’s competitiveness.
In his Budget 2013 speech this week, chancellor George Osborne said the 0.5 per cent special stamp duty reserve tax, which applies to collective investment schemes when investors sell units that are then re-issued within a two-week period, will be scrapped on 1 April 2014.
The Government says the move will save the asset management industry £145m in the 2014/15 tax year, £145m in 2015/16, £150m in 2016/17 and £160m in 2017/18.
Asset managers have consistently flagged Schedule 19 as one of the main obstacles to establishing new funds in the UK and one reason the country is increasingly losing business to international rivals such as Dublin and Luxembourg.
Investment Management Association chief executive Daniel Godfrey says: “The UK is already a world-class location for asset management and this is a vital step in allowing the UK to compete.”
The Government has proposed further steps to support the industry in a document published alongside the Budget that outlines a number of measures to improve the sector’s international standing.
The UK investment management strategy outlines plans to consult on three further tax issues that make UK-domiciled funds unattractive, improve the regulatory environment and launch a marketing strategy to investors in Asia and the Americas.
M&G Investments chief executive Michael McLintock says: “Osborne’s major statement of intent has not only recognised the importance of the UK investment management industry to our economy but will also help ensure it remains on a competitive footing on the world stage. His plans have our full support.”