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IMA Praises UK Tax Changes

by Robert Lee Tax-News.com, London

16 July 2009

Richard Saunders, Chief Executive of the Investment Management Association (IMA) has said that the changing regulatory and tax landscape was creating new opportunities for investment managers and urged the industry to take advantage of them in order to reap the benefits.

Commenting on the tax reforms announced over the past 18 months and paying tribute to the Treasury and HM Revenue and Customs on the recent tax reforms, he told a conference in London on July 14:

"We will be getting a regime which for the first time provides certainty that funds will be treated as investing, not trading. We will also be getting a new, elective regime of ‘Tax-Elected Funds', which will effectively provide full transparency for investors. Since January the 10% maximum investor rule which was inhibiting the growth of Qualified Investor Schemes has gone. And we have had a new property funds regime since April last year."

Setting out some of the new product opportunities this would create, Saunders noted the increased significance of the reforms in the light of the proposed Alternative Investment Fund Managers (AIFM) Directive:

"This document [the AIFM directive] has of course been widely criticized, but make no mistake: legislation is coming, and the name of the game is getting the draft improved, not trying to stop it in its tracks.”

“One of the good things about the directive is its introduction of a pan-European passport for onshore institutional funds. That will not be available for offshore funds - except in restricted circumstances which may not survive the process of negotiation. Indeed the current draft goes further by effectively banning all non-compliant offshore funds, including hedge funds, though that is not something I would expect to survive the current negotiations.”

“Even so, onshore funds will be at an advantage. And that is what will make QIS [Qualified Investor Schemes] suddenly an attractive option. The tax reforms could not be more timely."

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