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Revenue leaves fund managers in limbo

The Inland Revenue has been accused of holding up the development of hundreds of new funds because of delays to tax proposals.

The new Coll and qualified investor scheme funds have been tipped to change the face of UK fund management as they open the door for a range of investments based offshore.

Asset management firms are keen to offer the new funds but complain that the Revenue has not decided on an appropriate tax treatment.

Last year, the Revenue issued a discussion paper on collective investment schemes and proposed the introduction of 30 per cent corporation tax on qualified investor schemes.

The paper followed the implementation of the Coll sourcebook in April, which lists the rules.

Credit Suisse Asset Management product development manager Toby Hogbin and Artemis product and communications director Nick Wells have appealed for the Revenue to develop a unified approach.

Firms say the investment marketplace could leap forward once the tax status has been finalised but a unified regulatory status for the funds has not been developed.

This means that no funds can be launched because investors will not know how much tax they will pay on returns.

Hogbin says: “The new regulations really leave us with a lot of potential but, in terms of product development, we cannot do anything until the Inland Revenue completes the tax treatment of these funds.”

Wells says: “This is not the first time that the industry has been left waiting for the Inland Revenue. It is very difficult when you know what you can do but are left waiting around for the very final details.”

The Revenue was unavailable for comment.

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