Industry praises Budget fund reforms

Budget reforms could end up benefitting the UK investment fund industry, according to one group.

The Investment Management Association (IMA) said that changes to the law made the UK a ’serious contender’ for attracting foreign cash, as well as keeping investment money from Britons within the country.

In the Budget, the launch of a special new ’Tax Elected Fund regime’ to boost the ability of investment funds to market themselves abroad and new clarifications to the tax system regarding funds were both included in the reforms.

Julie Patterson, director of authorised funds and tax at IMA, added: ’One of the most valuable outcomes of the joint working group on UK fund tax reform has been the improved consultation and strengthened trust between the industry and government.

’This package of reforms, coupled with the UK’s fund regulatory regime, make the UK a serious contender as a fund domicile, for UK and overseas investors and for UK investors in particular, authorised funds can now offer a tax-efficient vehicle for exempt investors, such as pension funds, charities and Child Trust Fund, ISA and Sipp investors.’

The Budget, launched last Tuesday by chancellor of the exchequer Alistair Darling, has received criticism from some financial groups for some of its reforms.

In particular, the decision to raise income tax from 40p in the pound to 50p has led to fears that more high net-worth individuals could leave the country in future.ADNFCR-2318-ID-19150492-ADNFCR