For Immediate Release: Tuesday 23 October 2001

AUTIF’s PRE-BUDGET REPRESENTATION

AUTIF has written to the Chancellor of the Exchequer, making the following pre-Budget representations:

ISAs

• Allowing savers to transfer their accumulated savings without penalty from cash to stocks and shares.  This will further encourage saving at a time of lower interest rates.

• Indefinite continuation of the tax credit on distributions within ISAs and PEPs, without which after 2004 equity fund ISAs will lose their basic rate income tax relief.

• A subscription limit divisible by 12 to encourage monthly plans up to the limit.

• Extension of eligibility to Futures and Options Funds, which can offer an attractive haven to investors in falling markets.  This will be particularly pertinent when the new UCITS Directive, which abolishes existing categories of funds, comes into force.

Offshore funds

• Abolition or substantial reform of this legislation, which is no longer relevant in today’s circumstances, and amounts to a barrier which undermines our arguments in Europe for a single market in financial services.

Inheritance Tax

• Exemption of holdings of stocks and shares by non-residents.  The existing rules bring in very little revenue and simply discourage non-residents from investing in the UK.

Stamp Duty Reserve Tax

• Abolition of SDRT on fund of funds structures, which places them at a significant competitive disadvantage by giving rise to a three-tier stamp charge. 

• Exemption of fund re-organisations.  The present rules deter firms from sensible rationalisation of their fund ranges, imposing additional costs and administrative burden, in return for, we believe, very little tax revenue for the Government.

Ends

Richard Saunders, Director General, AUTIF 020 7831 0898
Lucy Shirley, Tax Adviser, AUTIF 020 7831 0898
Clare Arber, PR Manager, AUTIF 020 7831 0898

Notes to Editors:

A copy of AUTIF's full representation is attached.