CITY money managers yesterday cheered the government’s abolition of a complex transaction tax on equity funds in a move designed to attract more than £100bn of foreign investment to UK shores.
Big hitters Aberdeen Asset Management, BlackRock and Legal and General Investment Management (Lgim) said scrapping the 0.5 per cent fund transaction tax – called Schedule 19 stamp duty reserve tax (SDRT)– would boost the UK’s competitiveness and attract more funds to be based here.
The move, which comes into force in 2014-15, is set to save the industry £600m in total by 2018 and will reduce back office complexity at fund managers. SDRT returns have to be filed every two weeks to HM Revenue and Customs under the current rules.
“We’re delighted with the chancellor’s announcements today,” Martin Gilbert, chief executive of FTSE 100 listed Aberdeen Asset Management, told City A.M. “The fund management industry is a significant asset to UK PLC in terms of employment and growth.”
Lgim chief operating officer Simon Thompson said: “Its abolition should help to create more of a level playing field when comparing the UK to other domiciles such as Luxembourg and Dublin”
Incoming European regulations this summer could see more £100bn of offshore funds move onshore and the Treasury is keen to make sure these come to UK.
Tony Stenning, head of UK retail at BlackRock, said SDRT had been a “stealth tax” on savers and said he was delighted with the move.