UK tax regime keeping funds offshore

The UK is losing out as a destination for investment funds because of its
unfavourable tax regime, according to a report by KPMG written for the
Investment Management Association (IMA),

According to KPMG, the funds are going to places like Luxembourg, Ireland and
other countries.

Many investment managers believe this is down to the UK’s unfavourable tax
regime, the report said.

In the last two years net sales of non-UK funds have grown from 1% to 20% of
the UK market, while sales of UK funds abroad remain very low. This trend is set
to continue particularly as funds evolve and become more complex, KPMG said.

Julie Patterson, director of regulation, operations and taxation, of IMA
said: ‘The UK is losing out because of the unnecessarily complex and burdensome
tax regime.’

‘Funds are being established overseas and many jobs go with them, leading to
a loss of revenue for the UK,’ she added.

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