Tax changes boost UK as domicile for global funds

Significant changes to the tax regime means that the UK is open for business as a domicile for both funds and management companies, it is claimed.

The Euromoney UCITS 2011 conference on how regulation should develop to protect the UCITS brand and investors heard that the UK is one of the key domiciles.

Julie Patterson, director of authorised funds and tax at the IMA (Investment Management Association said that there have been significant changes to the UK's fund tax regime.

‘She explained that the UK is already a major domicile for alternative investment funds, with around 2,000 such vehicles based there, but more can be done.

‘For the UK to be able to offer competitive UCITS master feeder structures, there needs to be a handful of further changes. We are pleased, therefore, that the Government has committed to the introduction of tax transparent funds in 2012 and to making certain technical changes to accommodate master feeders,’ she told the conference.

‘Also, this year's Finance Bill includes provisions for no SDRT Schedule 19 charge for funds investing in other funds that are not materially invested in UK equities. This is a step in the right direction, but the IMA continues to call for the abolition of the SDRT Schedule 19 regime,’ she added.

As far as UCITSs are concerned new UCITS management company passport will allow UK management companies to manage non UK UCITS. The Finance Bill ensures that UK management companies will be able to manage non UK UCITS without adverse UK tax consequences for the funds or their investors, she also explained.

‘The UK is a leading global centre for investment management, including for UCITS and alternative investment funds. We share the Government's objective to ensure it remains so.
The steps being taken now to further improve the competitiveness of the UK fund and asset management industry are very welcome,’ she concluded.