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PBR: Derivatives to be treated as investing

HM Revenue and Customs has announced as part of the pre-Budget report that the use of derivatives can be treated as investing rather than trading.

The Investment Management Association has welcomed the decision, saying the issue has become more important recently with the increasing use of derivatives in authorised funds.

IMA says it is continuing to call for a definitive statement that authorised funds will always be treated as investing, in the interests of tax certainty for investors.

Director of authorised funds and taxation Julie Patterson says: “This clarification on the use of derivatives is a welcome and helpful statement against a background of increasing numbers of funds choosing to domicile offshore where tax certainty is ensured. We continue to believe, however, that in the longer term all funds should be treated as investing and not trading and we hope to work with HMRC to this end.”

HMRC also announced a consultation on simplification of stamp duty reserve tax.

Patterson says: “We believe that abolition is the best option, as this funds-specific tax puts UK funds at a competitive disadvantage, drives funds offshore and results in consequential loss of tax for HMRC.

“IMA has commissioned research to support the case for outright abolition which we believe will not result in any tax loss.”


After eight

Barclays has introduced an income investment paying 8 per cent a year over a five-year period or up to 55 per cent growth. The income investment is ideal for those with equity Isas nearing retirement who do not wish to take much risk.

Lawyer’s warning to advisers over Newcob changes

Advisers need to ensure that they are fully compliant with the changes to Newcob introduced to coincide with Mifid so as not to open themselves up to legal liabilities, says leading financial services lawyer Simon Morris.The CMS Cameron McK-enna partner says he believes advisers are being too complacent about the changes that will take place […]

Large cap fits

Stock prices climbed higher last week as credit conditions appeared to be in the process of stabilising. The Dow Jones Industrial Average rose 0.5 per cent to end the week at 13,896, the S&P 500 index advanced 0.1per cent to 1,526 and the Nasdaq Composite gained 1.1per cent to 2,702.


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