The amendments were unveiled by the Government back in March as part of the 2013 Budget, where they were referred to as the UK Investment Management Strategy, and were aimed at making UK-authorised funds more attractive and accessible to foreign investors.
With the publication of the amendments last week, any securities bought from 19 December onwards will benefit from the new tax treatment, a spokesperson for the Investment Management Association said.
The changes simplify the way UK fund management companies are able to market their funds abroad by facilitating the payment of gross interest distributions, according to the IMA, which represents the UK’s asset management industry.
On Friday, the IMA formally welcomed the publication of the amendments. In a statement, Julie Patterson, the association's director of regulatory affairs, said they would "ensure that a UK fund can be marketed and sold more easily to non-UK investors, and make it more attractive for distributors to promote UK-domiciled funds”.
Until now, non-UK investors in UK funds have had to pay a withholding tax on income generated by the investments, and deal with complex rules when they went to reclaim the tax, or if they wanted to arrange to receive their income gross.
The UK-authorised funds eligible for the new tax treatment include all bond funds; real estate funds and mixed equity/bond funds may also be included, the IMA said.
To see the Authorised Investment Funds (Tax) (Amendment) regulations on the UK Government's website, click here.
