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Labour confirms plans to resurrect fund manager tax

Labour will reintroduce a tax dropped by Government to fund its plans to abolish the bedroom tax.

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Labour is to bring back a tax on hedge funds previously dropped by the Government as part of a plan to abolish the so-called “bedroom tax”.

The party has confirmed it plans to bring back the stamp duty reserve tax, or Schedule 19, charged at 0.5 per cent on collective investment schemes. It is payable when buying shares in UK-based or UK registered companies.

The levy was dropped by Chancellor George Osborne in the 2013 Budget with effect from 1 April 2014.

Prior to this, it was applied to collective investment schemes such as unit trusts or open ended investment companies when investors sell their units which are then reissued to new investors within a two-week period.

The duty is paid by the fund manager rather than the investor.

The Investment Association has previously claimed the resurrection of the tax would make the UK less competitive, as it is an obstacle to establishing funds in the UK.

Last month, IA chief executive Daniel Godfrey said: “The abolition of stamp duty for authorised funds is not a tax break for hedge fund billionaires, but a necessary step to make UK funds viable compared with international funds. They are enjoyed by ordinary people.”

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