Implications of the UK 2013 Budget for Investment Funds

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The 2013 budget, delivered by the U.K.’s Chancellor of the Exchequer, George Osborne on March 20, incorporated a number of provisions affecting investment funds, which are included in a UK investment management strategy.

The U.K. government announced a package of measures in areas of taxation, regulation and marketing, designed to make the UK one of the most competitive places in the world for investment funds.

Regarding taxation, stamp duty reserve tax is to be abolished by 2014/15, and withholding rules for bond fund interest distributions are to be altered to make these funds more attractive to foreign investors. Changes will also be made to tax provisions on the residency status of offshore UCITS, the investment manager’s exemption and tax transparent funds.

For regulation, the strategy paper states that the FSA has agreed to actively engage with the fund management industry to streamline and improve the efficiency of the fund authorization process.

Finally, on marketing strategy, the U.K. government has stated that it will introduce a one-stop shop service for fund managers wishing to set up in the UK, through collaboration with TheCityUK and the Investment Management Association.