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Press Release

For immediate release: Thursday 20 October 2005


In its Pre-Budget representations submitted to the Chancellor this week, the Investment Management Association has urged the Government to commit to a fundamental review of the taxation of funds and savings income in the UK.

In future years, investment funds will form a significant part of the UK's personal savings portfolio, but with the raft of different tax regimes currently governing savings and investment products, clarity and simplicity is needed. IMA is therefore, calling on the Chancellor to use the 2006 ISA review as an opportunity to conduct a comprehensive review of savings incentives.

Ahead of the conclusions of that review, IMA calls for:

  • A debate about the trading versus investment distinction for pooled investment vehicles, in light of evolving investment strategies and investor demands
  • The offshore funds regime to allow properly for funds of funds
  • To extend the "corporate streaming" provisions to pension funds and charities, allowing them to reclaim tax sticking in UK investment vehicles and to address a long-standing tax disadvantage of UK property funds.

IMA also calls for the abolition of Stamp Duty on securities and Stamp Duty Reserve Tax on fund units, or their staged abolition. In the interim there remain a number of anomalies in the application of SDRT which need to be addressed.¹

Julie Patterson, Director of Regulation and Taxation at the IMA commented:

"The new pensions regime has shown what can be achieved by simplification. There is similar scope when it comes to savings and investment products more generally. IMA has proposed that a single, composite rate of savings tax should be applied to such products in order to provide clarity for investors, a move, which at worst, will be tax neutral for the Exchequer. Moreover, it would make the tax-free ISA more simple and equitable than it is today. We urge the Chancellor to commit to continuing this debate during the 2006 ISA Review."

IMA's submission is attached.


For further information, please contact:
Helen Stephenson, Communications Officer, IMA, 020 7831 0898

Out of hours contact:
Sally Biggs, Partner, Polhill Communications, 07961 463864    

Notes to editors:
1. Further SDRT issues:

  • Transfers of initial property for newly-seeded OEICS should be exempt from SD/SDRT/SDLT, as is already the case for authorised unit trusts
  • The Stamp Taxes Manual should be updated to provide confirmation that the position for in specie contributions and transfers is identical for OEICs and AUTs
  • Stamp Office Newsletter No.7 provides the blueprint for a logical and commercial approach for SDLT charges in AIFs and we urge the Government to pursue this
  • A proper exemption from SDRT for pension funds and charities should be granted, no matter what pooled vehicles they wish to invest in
  • Confirmation that no SDRT charge will arise on the transfer by a pension fund of units/shares in a UK collective investment scheme in exchange for a life assurance policy
  • Dispensation from the s87 FA 1986 charge on non-pro rata in specie creations for AIFs in order to level the playing field for large and small funds.

Investment management association