Budget 2020: Government announces review of UK funds regime
The government will open a review into the VAT treatment of fund management fees as part of a wider look at the UK funds regime.
Annual management charges levied by fund houses are currently VAT-fee, but the fees clients pay are subject to the tax.
The consultation forms part of a broader review of the UK’s funds regime, which will cover direct and indirect tax as well as regulation.
The Treasury said the review will “explore the attractiveness of the UK as a location for the intermediate entities through which alternative funds hold fund assets.”
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It said that there “remain barriers to the establishment of these intermediate fund entities in the UK,” and that these barriers “are leading these entities to be located outside of the UK”.
Chris Cummings, chief executive of the Investment Association, said: “We look forward to contributing to the government’s review of the UK’s funds regime and share its aim to make the UK a more attractive location for investment managers to do business.”
“The UK is already a leading hub for the investment management industry and it is vital that we remain competitive.”
“We are pleased that the government has listened to our industry and will be consulting on simplifying the process for allowing investment funds set up overseas to be marketed in the UK. It is right that savers have access to the widest possible choice of funds.”