Government to ease tax on asset managers but promises post-Brexit Britain will not be 'race to the bottom'

 
Lucy White
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Stephen Barclay (left) will lead a new asset management taskforce (Source: Getty)

The government promised to boost the attractiveness of Britain's asset management industry today by promoting the "competitiveness" of its tax and regulatory structures.

In its Investment Management Strategy II paper, HM Treasury said it recognised the importance of tax and regulation in facilitating growth post-Brexit in the £8.1 trillion UK industry.

Read more: The UK's asset management industry has seen a boom since Brexit – but weaker currency has a large part to play

It promised to look into loosening the tax rules for short-term business visitors, but denied there would be a massive wave of deregulation when the UK uncoupled from the EU.

"There was some concern in EU 27 capitals that the intention of the UK was to win a race to the bottom with a big deregulatory agenda. That's not what comes from the firms I speak to – they say the expertise of the UK regulators, the standards and legal clarity, are part of what made London in the first place," said economic secretary to the Treasury Stephen Barclay.

"I'm not saying you wouldn't look at the odd area here or there, but the idea that there would be massive race to the bottom is not what the industry's looking for."

Read more: Budget 2017: Corporation tax falling to 17 per cent by 2020

The new strategy will also see the formation of an asset management taskforce, chaired by Barclay, partly to represent the industry's interests in Brexit negotiations.

The taskforce will help to bring together asset management and fintech to further boost the UK's position in the financial world, and bring about more dialogue between the industry and its regulator.

Some relief was also granted to asset managers who want to ensure they can continue to market their funds to EU investors. The government said it aimed to make sure investors could continue using the EU's Undertakings for Collective Investment in Transferable Securities (Ucits) structures, which allow funds to be sold to any investor in the EU.

But Barclay warned: "We're definitely not in a place to say 'definitely this' or 'definitely that' because we're only in phase one of the negotiations. The point is that through the taskforce, we will get a deeper understanding and give industry feedback."

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