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UK tax system is stifling onshore business, says IMA

Investment Management Association chief executive Richard Saunders is urging the Treasury to introduce more tax reforms to allow UK funds to compete on a level playing field with their European counterparts.

Speaking today, Saunders said: “It is an open secret in the funds world that if you want to launch a new product you don’t base it in the UK and that is for tax reasons. This is not to minimise or avoid your own taxes, but to avoid complexity and to reduce the risk of your client being exposed to an unexpected and unjustified hit.”

The IMA head called for a tax-exempt regime for UK authorised funds and legislation to assure that funds are treated as investment vehicles rather than products traded for tax purposes. He also proposed the abolition of Schedule 19 stamp duty reserve tax on fund units and the removal of the 10 per cent limit on single investors in qualified investor schemes.

He said: We need a regime that does not work to the disadvantage of the UK and encourage business to move offshore. At a time of economic slowdown and a growing public sector deficit, that is simple good sense. I believe the goodwill exists in the Treasury to address these issues with the seriousness they deserve. The next few weeks and months will show if my optimism is right.”

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