UK funds are ‘less competitive’ than offshore rivals

On the eve of the Budget, KPMG has warned that tax changes are needed to
boost the competitiveness of UK funds versus their offshore competitors.

Currently, UK investment funds can be taxed on trading profits, a practice
which does not occur offshore. KPMG says this could be avoided by permitting
trading funds to be established in the UK.

It is also calling for the abolition of fund-specific stamp duties, which
only applies to UK funds, therefore making it more difficult to market these
funds overseas.

Even subtle tax changes would have big revenue impacts. Previous research
KPMG undertook concluded that for every £1bn of funds under management in the
UK, nearly £1m of tax revenue is generated.

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