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Enhancing the competitiveness of the UK’s asset management industry is the focus of three consultation papers announced today by the Economic Secretary to the Treasury, Kitty Ussher MP. These consultations follow a package of measures announced in Budget 2008, designed to make the UK a more competitive location for asset management and to advance the Government's City competitiveness agenda.
Kitty Ussher MP said:
“The Government is determined to ensure that the UK remains a competitive place to do business. The consultation papers published today are a step forward in improving the taxation environment for the asset management industry. We are determined to maintain momentum on improvements to the taxation of asset management to ensure the industry remains highly competitive in the face of new global challenges.”
The consultation papers will propose the:
- introduction of a direct tax exemption regime for UK Authorised Investment Funds;
- removal of the tax as a barrier to Qualified Investor Schemes by replacing the substantial holding rule; and
- adaptation of the tax rules for Investment Trust Companies to deliver tax efficient investment into interest bearing assets.
Background
1. The UK’s asset management industry is important to the UK’s economy with UK-based firms managing £3.8 trillion of assets and employing over 25,000 people.
2. The Government has committed to work with the sector to enhance the environment for UK asset management. Work undertaken has included improving understanding between the asset management sector and the Government particularly on tax issues, launching a new tax regime for Property Authorised Investment Funds and allowing electronic transfer of ownership of shares and units in investment funds.
3. As part of the ongoing work in this sector, Budget 2008 announced a package of measures for further improvements to enhance taxation for asset management. The Government today has published three consultation papers that build upon those Budget announcements and welcomes industry’s views. The papers propose:
- introduction of a direct tax exemption regime for UK Authorised Investment Funds;
- removal of the tax as a barrier to Qualified Investor Schemes by replacing the substantial holding rule; and
- adaptation of the tax rules for Investment Trust Companies to deliver tax efficient investment into interest bearing assets.
4. The consultations can be found on the Treasury’s website:
