For immediate release: Tuesday 22nd October 2002

IMA PRE-BUDGET REPRESENTATIONS

The IMA published today the representations it has sent to the Chancellor of the Exchequer, the Rt. Hon. Gordon Brown MP, ahead of his pre-Budget report expected in November.  In its submission, IMA argues that:

• The regime for taxation of Collective Investment Schemes should be overhauled in light of the Offshore Funds Review, the potential reform of corporation tax and the Sandler Report, in order to create a certain and fair long term regime.
• Individual Pension Accounts should be reformed so that contributions are made to a portable IPA wrapper rather than a full-blown pension scheme.
• ISA and PEP wrappers should benefit from an indefinite continuation of the tax credit on distributions, and savers should be able to move their accumulated savings from a cash component to a stocks and shares component.

While strongly supporting the complete abolition of Stamp Duty and Stamp Duty Reserve Tax (SDRT) on share transactions, IMA calls for three immediate reforms:

• The abolition of SDRT on fund of funds structures, because the three-tier charge places them at a significant competitive disadvantage;
• An exemption for fund re-organisations.  The present rules deter firms from sensible rationalisation of their fund ranges, imposing additional costs and an administrative burden;
• The removal of existing anomalies within the new SDRT regime, which, for example, has had an unintended and detrimental effect on pensions schemes seeking to merge.

Other measures that IMA seeks include:

• Common Investment Funds, a charitable fund used by charities, should be exempted from VAT on management charges (currently paid at the standard rate), to bring them into line with authorised collective investment schemes.
• So-called “Exempt Unauthorised Unit Trusts” should be made truly exempt from income tax. 
• Pension Fund Pooling Regulations should be made more workable.

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For further information please contact:

Nathan Hall, Taxation Adviser,  IMA, 020 7831 0898

Clare Arber, Head of Communications, IMA, 020 7831 0898

65 Kingsway London WC2B 6TD

Tel: +44 (0) 20 7831 0898 Fax:+44 (0) 20 7831 9975

www.investmentuk.org

Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.