For immediate release: Wednesday 9th April 2003

IMA AND PIMA ARE DISAPPOINTED AT THE LACK OF EXTENSION ON THE 10% ISA TAX CREDIT

IMA and PIMA have expressed disappointment that the Chancellor of the Exchequer, Gordon Brown MP, did not act in the Budget to keep the tax credit for stocks and shares dividends within ISAs and PEPs.

From next year the 10% tax credit that ISAs receive on dividend distributions is due for abolition.  This will mean the tax relief on Equity ISAs will benefit only higher-rate taxpayers.

IMA and PIMA have joined with four other trade associations in urging the Government to retain the tax credit, arguing it has significant benefits for consumers, the economy and helps to meet the Government’s target of encouraging more people to save.  They will now seek to secure an appropriate amendment during the passage of the Finance Bill.

Commenting on today’s announcement, Richard Saunders, IMA Chief Executive, said:

“I’m disappointed that the Chancellor has not taken this opportunity to announce an extension to the tax credit for Equity ISAs.  If the Government does not relent on the issue, investment in Equity ISAs will be of benefit to only the few and not the many.

“The IMA will continue to make the case for the retention of this tax credit.  It has done much to increase national savings and enlarge share-ownership.  We will now take our argument to Parliament.”

Tony Vine-Lott, Director-General of PIMA, said:

“This was a major opportunity for the Treasury to give a boost to savings. It is now a missed opportunity. However, the campaign goes on and we will be fighting a vigorous parliamentary campaign during the passage of the Finance Bill to retain the tax credit savings incentive.”

For further information, please contact:

Richard Saunders, Chief Executive, IMA, 020 7831 0898

Tony Vine-Lott, Director General, PIMA, 07790 006108

Clare Arber, Head of Communications, IMA 020 7831 0898

Iain Anderson, Cicero Consulting, 020 7665 9532

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.