The Investment Management Association has given the Treasury a stamp of approval over its discussion paper over tax payments in property funds.
The IMA believes that the Property Authorised Investment Funds (PAIFs) discussion paper should ensure that pension funds, charities, SIPP, ISA and CTF investors will no longer pay tax in funds, with the only issue being whether the cost of implementing the regime outweighs the benefits.
The group says this will depend on two issues, the first of which is introducing a feeder fund to stop limitations on corporate investors receiving 10 per cent or more of a funds distributions when they invest direcly in a PAIF.
While the IMA is broadly positive that this will be solved, the group is more concerned on its second issue, which is the proposal to ring fence and distribute three types of income. The group believes two would be sufficient as it would as three would mean significant change to the distribution model as well as being confusing to retail investors.