There have been a range of announcements which will directly and indirectly impact the UK asset management industry.
These include an announcement to maintain the competitiveness of the UK by addressing some of the tax implications of the upcoming implementation of UCITS IV. This includes Finance Bill legislation to ensure UCITS funds are not UK tax resident as a result of the UK manager's activities. In addition, a consultation will begin in June 2011 with a view to introducing a new UK tax transparent fund vehicle in Finance Bill 2012.
The Budget also announced the introduction of Finance Bill 2011 legislation that had previously been consulted on including enabling legislation for the upcoming reforms to the Investment Trust Company taxation regime and changes to Stamp Duty Reserve Tax for fund of fund structures.
An anti-avoidance consultation review of Unauthorised Unit Trusts legislation is to be published in Summer 2011.
The proposed introduction of a new 'Junior ISA' also presents an opportunity to product providers.
Who will be affected?
Managers of UCITS funds, Investment Trust companies, UK authorised investment funds and Unauthorised Unit Trusts.
UCITS IV management company passport will be effective from the Royal Asset of Finance Act 2011. The Schedule 19 Stamp Duty Reserve Tax changes will take effect shortly after Royal Assent. Investment Trust company tax reform will be introduced in Finance Bill 2011 although the associated regulations are expected to be implemented in either late 2011 or early 2012. The establishment of UK transparent pooling vehicles remain subject to consultation but legislation is expected in Finance Bill 2012.
While the announcements are generally welcome in spirit, there is a considerable amount of consultation proposed - so we will await the draft legislative provisions eagerly. The taxation of unauthorised unit trusts has been singled out as one of the first areas to fall under the anti-avoidance review and we await the consultation paper.