For Immediate Release: Wednesday 10 December 2003

IMA URGES GOVERNMENT TO STICK TO PENSIONS TAX REFORM

Responding to the proposals announced in the Pre-Budget Report, Richard Saunders Chief Executive of the IMA said:

“The Chancellor now has a choice. He can make radical reforms to restore confidence in long-term savings. Or he can turn his back and allow the present ramshackle system to continue. We urge him to be bold.

“We are concerned at the suggestion he might not proceed with pension tax simplification. The proposals in the consultation paper hold out the prospect of a new generation of highly attractive pension products for savers; the Treasury should go forward and not turn back now.

“We are of course disappointed that the Government is set on abolishing the ISA dividend tax credit, thus removing a central plank of its flagship savings product. We welcome, however, the commitment to continue to examine the taxation of savings. IMA has been in discussion with the Revenue for some time and is now developing proposals which will be submitted formally in due course.”

On other aspects of the report:

• IMA welcomes the proposals to deal with the offshore funds regime and the FSA’s new rules on authorised funds in 2004; these should be seen, however, as short-term fixes pending a more fundamental review

• The proposal to consult on real estate investment trusts is most welcome. These proposals will need to encompass unit trusts and OEICs as well as investment trusts, particularly as the FSA’s new rules will be much more suited to the requirements of property funds

• IMA is disappointed that once again no room has been found for reforms to stamp duty and stamp duty reserve tax

• IMA welcomes, however, the decision to make no immediate changes to the VAT treatment of fund management.

-Ends-

For further information please contact:

Richard Saunders, Chief Executive, IMA, 020 7831 0898

Helen Stephenson, Communications Officer, 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.