IMA PROPOSES SIMPLIFIED SAVINGS TAX 

The Investment Management Association is today launching proposals for a new savings tax regime for investment funds.  IMA is calling on the Government to replace the five existing and two potential new tax regimes and rates with one simple composite tax.

The single savings tax, of up to 15%, would replace income and capital gains tax regardless of what the fund was invested in, where it was domiciled and whether or not it was regulated.

Further incentives could be offered to encourage savings and mitigate the distributional effects of a single rate.  IMA suggests four possibilities: first, exempting non-higher rate taxpayers from the single savings rate; second, offering a tax-free allowance after which receipts are taxed at the single rate; third, continuing the ISA; and fourth, and most radically, introducing a lower savings rate of up to 5%.

Richard Saunders, Chief Executive of the IMA commented,

“The time is right for a fresh and radical look at the savings landscape.  Our proposals seek above all simplicity and clarity for investors. The Government has already collapsed eight pensions tax regimes into one and the same is possible for the taxation of funds. I believe our proposals represent a further important step to a simpler and more transparent savings culture.”

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For further information, please contact:

Helen Stephenson, Communications Officer,  020 7831 0898

Mona Patel, Head of Communications, 020 7831 0898                                          

Out of hours contact:

Mona Patel, Head of Communications, 07834 089332

Notes to Editors:

1. Current tax regimes exist for authorised funds depending on whether or not the fund is primarily invested in gilts/bonds, Offshore Funds, Unauthorised Unit Trusts and pension fund pooled vehicles. The two potential new tax regimes are for new authorised funds for institutional and sophisticated investors and Property Investment Funds.

2. Current tax rates are: 0% for non-tax payers, 10% starting rate, 20% lower rate on savings and capital gains, 22% basic rate, 32.5% dividend rate and 40% higher rate.

A full copy of the report is attached.

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.