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Revenue says no charge for switch to New Star fund

The Inland Revenue is allowing investors in Rathbone&#39s special situations fund to switch without charge to Patrick Evershed&#39s new select opportunities fund at rival New Star.

In a move the firms believe is unique, the Revenue is permitting Rathbone unitholders to keep their investment with manager Evershed – who recently left the company to join New Star – without being charged or incurring a capital gains tax liability.

Rathbone has written to investors in the fund to offer them the switching option – which both companies jointly applied for – but says it has no idea how many will make the change.

The Revenue&#39s decision has been well received by IFAs, who believe it will go a long way to placating investors who bought the fund on the strength of Evershed&#39s name, only to see him depart to New Star.

Advisers believe that if the Revenue extends its judgement to other firms in the same position, investors could buy into funds more freely without fear of managers leaving them in the lurch.

However, Rathbone bel-ieves the application may only have been accepted because the special situations and select opportunities funds are virtually identical.

Managing director Peter Pearson Lund says: “It is an elegant solution which gives those investors who want to follow Patrick to New Star the option of doing so with out incurring any expense.”

Chase de Vere savings and investments manager Anna Bowes says: “It is a wonderful opportunity for investors concerned by the recent spate of fund manager moves.

“However, they should not automatically switch. Sometimes, the replacement can do as well – if not better – than their predecessor.”


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